SERVICE TAX ON MILLING OF RICE

[pankaj jain]

Respected Ganeshan Kalyani ji,

milling of rice is an intermediate production process as job work for manufacture of alcohol. . As per finance act 2015 ,new changes in notification no. 25/2012-ST shall be effective from notified date.(expected to be notified soon). In entry 30, in item (c), for the words “any goods”, the words “any goods excluding alcoholic liquors for human consumption,” shall be substituted vide notification no. 06/2015 . Intermediate production process as job work in relation to manufacture of alcohol has omitted from the negative list (as per above said changes) . Please clear that the service tax on milling of rice will be applicable or not in the light of the above changes.

[Ganeshan Kalyani]

It is two separate activities. Milling of rice is first job work in relation to manufacturing of alcohol for human consumption is second. milling of rice is exempt. intermediate production process as job in relation to manufacture of alcohol is taxable.

AI Summary

Service tax on intermediate production processes now applies when work is linked to manufacture of alcoholic liquors, while standalone milling remains exempt. Amendment excluding alcoholic liquors from the phrase 'any goods' removes intermediate production processes for alcohol from the negative list; milling of rice performed as independent job work remains exempt, whereas intermediate production processes specifically in relation to manufacture of alcoholic liquors for human consumption are taxable.