Service Tax on Rice

[abbas mukhi]

Sir,Earlier the Service Tax was applicable on activities related to Rice as the same was not considered as agriculture produce by ST department.however later the exemption was also extended loading and unloading of Rice. My Question: We are providing supply of labour for loading and unloading of Rice.whether service tax is applicable on it ???

[Akash Deep]

Dear Abbas,

Please take notice of the the fact that who has the supervision and control of the the labour supplied by you. if the person to who you have supplied has the supervision and control of the labour, such supply of labour by our would cover under supply of manpower services and tax shall be payable on such service.reverse charge shall be applicable.

However, if your yourself undertook the job of loading and unloading of rice and completed the task under your or your agent's supervision or control, you may get the benefit of exemption as you pointed out in your question.

Regards

Akash deep

[KASTURI SETHI]

SH.AKASH DEEP Ji,

Sir, Agreed with your reply dated 19.1.2016 in toto. If A' (contractor) supplies manpower (labour) to a B (business entity) and B has the supervision and control over the manpower (labour) and even if labour does not work there, even then B is liable to pay ST (100%) under reverse charge mechanism. I meant to say ST is on "SUPPLY" of manpower and what kind of work is taken or not taken that is relegated to the background, unless specifically exemption is granted by the Govt.

Looking forward to your esteemed views with thanks.

[abbas mukhi]

Sir,

We are providing labours for loading and unloading of rice and the labours are working under complete supervision of us.Hence the Service is "NOT SUPPLY OF MANPOWER SERVICE but considered as "LOADING UNLOADING SERVICE"

We are charging to party on the basis of No. of labour supplied.Is it make any difference ??

[Mahir S]

Sir,

It appears from your above clarification dated 21.01.2016 that providing Labours for loading and unloading of Rice and thereafter receiving payments for providing such Labours (for loading and unloading of rice) , would be covered under the supply of Manpower Services and you shall be required to pay Service Tax for such services under RCM.

[Ganeshan Kalyani]

I agree with Akashji's reply.

[Akash Deep]

You re absolutely right karturi Sir.

[Akash Deep]

Dear Abbas

basis your clarification you are not providing manpower supply services for sure. what you are doing is providing services of loading or unloading of rice bags. you services are exempted vide entry 40 of 25/2012. the fact that you are charging the cost of service on the basis of number of man used in providing services dos not make any difference. that is just one method used for calculating cost of service.

AI Summary

Service tax on loading and unloading: exemption applies when contractor retains supervision; recipient supervision triggers reverse charge.
Service tax treatment of labour for loading/unloading rice depends on supervision and control: if the supplier performs and supervises the loading/unloading, the activity is an exempt loading/unloading service notwithstanding charging by number of labourers; if the recipient supervises the supplied labour, the transaction is supply of manpower services and is taxable under the reverse charge mechanism.