Liability of service tax on warehousing (   (21 Points)

21 August 2018  


I have a querry regarding service tax liability. There are following scenarios in which i need to know about the srvice tax liability.

1. 'A' is the owner of Warehouse who leases the warehouses to 'B'. There is a lease agreement between A &
B for a specified rate and time. Further there is a clause in the agreement that the warehouses will be used
only to store agriculture produce. Now will there be any service tax liability on 'A' on whatever receipts
he/she is receiving from 'B'.

2. Further 'B' gives the warehousing service to third parties by storing their agriculture produce and bills them with per bag/MT
per month basis. Now will 'A' and 'B' both or any one will be liable for service tax?

3. 'A' enters into a franchisee agreement with 'B' Ltd. and gives the operation to 'B' ltd to give the space to
third parties for storing their agricultural goods and bill them with per bag per month basis. Now whatever
the amount is received by 'B' ltd will be shared in a ratio of 70:30 i.e. 70% will be transferred to 'A'. And all expenses relating to warehousing will be born by B Ltd like fumigation, insurance, etc. Now whether there will be any service tax liability on 'A' and 'B'?

Please revert.