Service Tax - What about construction of warehouses for storage of rice?
AS per Sl. No. 14 (d) of the Notification No. 25/2012-Service Tax, dated 20.06.2012, Services by way of construction, erection, commissioning, or installation of original works pertaining to,- post-harvest storage infrastructure for agricultural produce including a cold storages for such purposes; are exempted.
Now is construction of warehouses for storage of rice exempted? Even in this case, the Central Warehousing Corporation (CWC) clarified to its officers that no Service Tax is payable for construction of warehouses meant for storage of agricultural produce.
But now that the Finance Minister has clarified that Rice is not an agricultural produce, CWC has clarified to its offices that now Service Tax is payable. The CWC is so careful that it has clarified that even in cases of construction of warehouses for storage of Agricultural produce where it is not known as to what commodity will be stored therein i.e. wheat, Rice or some other commodity, the construction of such warehouses will be subject to service tax w.e.f. 01.07.2012.
Even in this case, the CWC opted for VCES for the period up to 31.12.2012 and paid Service Tax with interest for the later period.
Imagine - the construction of an airport is exempted, but construction of a warehouse to store rice is not exempted, a hotel room costing less than Rs. 1000 per day is exempted, not a rice godown - your public toilet is exempted not your rice godown!Great Laws indeed!
CWC Circular No 77, Dated: December 23 2013
If you find rice costly, eat the Italian Pizza - Remember the French princess who said, "let them eat cakes", when she was told the peasants had no bread to eat.