Rent received through warehousing

1) if the landlord is letting out his warehouse to a tenant who is clearing Agent dealing with Cold Storage Serivce who is a clearing agent for dairy Products  -where the tenant is using such warehouse for stocking, loading and unloading of such products,   

     (a) does the tenant has to pay service tax on the rent what he pays to the landlord(the annual rent paid by the tenant exceeds 10 lakhs.    

     (b) the tenant says that according to M.I.(D.R)F.No.B11/1/2002-TRU,dT:-01.08.2002- he does not have to pay service tax on rent as he is a Clearing agent.  

     (c) kindly support me with articles or notifications with the answer. Thanking you in advance:)
 

There are two types of sevices mixed up here, Service of Renting Warehouse and C&F agency.

For C & F agents:

Where as you are providing service of renting of warehouse.

For agricultural activity which are exempted from service tax are as:

Following services relating to agriculture are covered under section 66D (d) (Negative list of Services)  of Chapter V of the Finance Act, 1994 and hence no service tax is levied on these services.

services relating to agriculture by way of—

(i) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing;

(ii) supply of farm labour;

(iii) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market;

(iv) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use;

(v) loading, unloading, packing, storage or warehousing of agricultural produce;

(vi) agricultural extension services;

(vii) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce;

As your service does not include " incidental to its use" but to  C&F agent service tax is liable to be charged.

Finally, let him bring permission letter to its effect from Commisioner of Exice & service tax.

Once again my hearty thanks for your instant reply sir.

thank you so much.

sir sorry to trouble you again but ,

i am providing a renting of warehouse service to my tenant and my annual rent received exceeds 10 lakhs from that tenant. so iam collecting service tax from the tenant.

now he says that since he is an Clearing agent he does not have to pay service tax on rent paid to me and he sends me this article which follows "
M.I. (D.R.) F.No. B11/1/2002-TRU, dated. 01.08.2002. storage and warehousing
(F) Clarifications issued by the Board/Ministry: Scope of taxable services : The services provided by public/private warehouses, Central Warehousing Corporation, Airport authorities, Railways, Inland container Depots, CFS, Storage godown and tankers operated by private individuals are covered. The services include space to keep goods, loading/unloading and stacking of goods, keeping inventory of goods, security arrangement, providing insurance cover etc.— However, mere renting of storage premises cannot be said to be in the nature of service provided for storage or warehousing of goods. Essential test is whether the storage keeper provides for security of goods, stacking, loading/unloading of goods in the storage area.—Cloakroom facilities provided at railway stations, bus stations etc. are passenger terminal amenities incidental to rail or road transport and are not taxable. [ For detailed clarification, please refer to M.I. (D.R.) F.No. B11/1/2002-TRU, dtd. 01.08.2002."

he is using the warehouse for stacking,loading & unloading og goods.

Kindly tell me what is right to do about it sir.

thank you so much.

I interpret it as: For him to be service provider, he is exmpted for that service.

But here you being service provider, you are liable to charge. There is no exemption for you.

thank you sir for your crisp answer.:)