Service tax on rent on storage of agricultural produce.

We have hired a warehouse for storing the bulk cargo for our client which is an agricultural produce. The warehouse ownre charges rent from us and we in turn charge rent from the cargo owner(i.e. our client).

Now, the warehouse owner contends that as far as he's concerned, he has given his warehouse on rent to us and he does not care what cargo we store in his warehouse, and says that he will charge service tax as Rent is a taxable service.

Now, my question is, can you guys please give me specific provisions to prove that storage of Agricultural produce is exempt from service tax?

Second question, what will happen if:

1) The owner doesn't charge service tax from us, and simply forward the bill to cargo owner WITHOUT ANY MARK-UP? AND

2) as in 1) except that we ADD A MARK-UP?

Please answer jaldi se.

 

Thanks and regards.

Replies (4)

 Services relating to agriculture or agricultural produce by way of   loading, unloading, packing, storage or warehousing of agricultural produce; is covered under negative lsit. You need to refer section 66D of the Finance Act,1994.

If the owner does not charge service tax and you forward the bill without the mark up then you can claim it as pure reimburesement and service tax will not be applicable.

However, if you mark up on the invoice then you would be required to charge service tax at the full rate.

thank you brother nirav bhai. much appreciated hahaha

btw, collar wali t-shirt to purana fashion ho gaya hai. wear some full neck wali shirt lol rofl

smiley  LOL

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