Service Tax ratio for manpower supply

[Ravindranath Inala]

Sir,

I am running a manpower supply at our place near Guntur of Andhra Pradesh. I am supplying manpower to Colleges, Research Stations and Agricultural Farms of Acharya N.G.Ranga Agricultural University. I am paying service tax of 12.36% regularly and filing returns.

As per the agreement during tenders, the university has agreed to pay total 12.36% percent.

As you have mentioned 25% and 75% the university has agreed to pay 100%.

Sir, shall I pay service tax for Agricultural labour, tractor driver and other employees working in Agricultural farm.

Kindly arrange to provide knowledge to me for the above queries.

Ravindranath

[MUKUND THAKKAR]

Sir,

shall I pay service tax for Agricultural labour, tractor driver and other employees working in Agricultural farm.

No need to pay service tax , all service pertaining to agriculture covered under negative list. please refer the following details which has self explanatory

Clause under Section 66D	Description of services which are not liable to Service Tax
(a)	Services by Government or a local authority excluding the following services to the extent they are not covered elsewhere - i.services by the Department of Posts by way of speed post, express parcel post, life insurance and agency services provided to a person other than Government; ii.services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; iii.transport of goods or passengers; or iv.support services, other than services covered under clauses (i) to (iii) above, provided to business entities;
(b)	Services by the Reserve Bank of India
(c)	Services by a foreign diplomatic mission located in India
(d)	Services relating to agriculture or agricultural produce by way of - i.agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or seed 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;

[VVFINDIA Taloja]

Dear Mr.Mukund

The referred notification is exempts only if farm labour supplied for the purpose of Agriculture production. But here incase of Mr. Ravindranath, he has supplied his labour to a college, Research Station and an University. University or the college's purpose is not to produce any agriculture products but to educate the students or to the research and development.

I am not sure whether the stated activity is exempted.

[Mahir S]

Mr Ravindranath,

Both the above replies are correct from their respective viewpoints.

However, if manpower are supplied and billed to a University for education purpose and no bifurcation of contract is made for supply of labour exclusively for college/research and farm labourers, then you are liable to pay service tax on total manpower supply.

AI Summary

Agricultural services exemption may not apply when manpower is supplied to educational or research institutions, making the supply taxable. The negative list exempts services relating to agriculture, including supply of farm labour and operations directly related to production, but that exemption applies only when labour is supplied for agricultural production. Labour supplied to a university, college or research station for education or research purposes does not automatically qualify as an exempt agricultural service; absent contractual bifurcation showing supply exclusively for farm production, the whole manpower supply may be liable to service tax.