cutting and carrying of firewood

[ramkishore gupta]

Respected Sir

Please let me know contract work done and amount received for cutting and carrying of firewood at tea bagan which is to be distributed among the workers of bagan free of cost as firewood is taxable under service tax or exempted???

[Rajagopalan Ranganathan]

Sir,

Section 66 D (d) (iii) of Finance Act, 1994 which enumerates negative list states that " 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.

Therefore in my opinion cutting and carrying of firewood at tea bagan will fall under negative list and no service tax is payable by you on such activity.

[Ganeshan Kalyani]

I agree with the views of Sri Rajagopalan Sir. Additionally i would like to mention that there is no consideration component and hence the same also forms one criteria for non applicability of service tax. Thanks.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of experts.

[KASTURI SETHI]

Yes. I also go along with all the experts. If all experts share their knowledge on this forum, the querists get fool-proof reply.

AI Summary

Negative-list exemption for agricultural processing bars service tax on cutting and carrying firewood distributed to workers. Cutting and carrying of firewood at a tea garden, which does not alter essential characteristics and merely readies the produce for the primary market, falls within the negative-list exemption for agricultural farm operations and is not subject to service tax; absence of consideration for distribution to workers further supports non applicability.