service tax on egg hatcheries

[Hariharan Sundaram]

Dear expert, whether service tax is applicable egg hatcheries on contract basis? Eggs are given to hatcheries in turn chicks are delivered and the considered paid to hatcheries. Whether service tax is applicable on such activity? Kindly clarify

[Rajagopalan Ranganathan]

Sir,

Hatching of eggs will belong to polutary branch and they cannot be treated as agriculture products. Hence the same is liable to service tax since the same is not listed in negative list.

[Ganeshan Kalyani]

I am also of the same view.

AI Summary

Service tax applicability on egg hatcheries: contract hatching treated as taxable poultry service, not an agricultural exemption. Hatching of eggs supplied to a contractor and return of chicks is characterised as a poultry service, not an agricultural product, and therefore consideration paid to hatcheries is treated as a taxable service since it is not covered by the negative list exemption.