Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: due date for vat payment :: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: VAT RATES :: ACCOUNTING STANDARD :: form 3cd :: articles on VAT and GST in India :: TDS :: list of goods taxed at 4% :: empanelment
 
 
« Latest Circulars »
  Evidence of Import under Import Data Processing and Monitoring System (IDPMS)
 Evidence of Import under Import Data Processing and Monitoring System (IDPMS)
 Issuance of 35 days and 49 days Cash Management Bills under Market Stabilisation Scheme (MSS) on January 13, 2017
 RBI to conduct Overnight Variable Rate Reverse Repo Auction under LAF on January 12, 2017 between 4.00 pm and 4.30 pm
  Macro and Micro Drivers of Business Potential of IFSCs in India (Dr. Urjit R. Patel, Governor – January 11, 2017 – at Gandhinagar, Gujarat)
 Macro and Micro Drivers of Business Potential of IFSCs in India (Dr. Urjit R. Patel, Governor – January 11, 2017 – at Gandhinagar, Gujarat)
 RBI extends Directions issued to The Suri Friends’ Union Co-operative Bank Ltd., Suri, West Bengal
 RBI-Exim Bank's GoI supported Line of Credit of USD 4.22 million to the Government of the Republic of Burundi
  RBI - Auction of Government of India Dated Securities
 RBI-Issuance of 63 days Cash Management Bills under Market Stabilisation Scheme (MSS)
 RBI extends Directions issued to the Brahmawart Commercial Co-operative Bank Ltd., Kanpur Uttar Pradesh

Regarding services provided by the Agricultural Produce Marketing Committee (APMC) /Board
May, 01st 2012

Circular No. 157/8 /2012-ST

F.No.354/234/2011-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Tax Research Unit)

153, North Block,

New Delhi, 27th April, 2012

To

Chief Commissioner of Customs and Central Excise / Central Excise & Service Tax (All)

Director General of Service Tax /Central Excise Intelligence /Audit; Commissioner of Customs and Central Excise/ Central Excise and Service Tax/ Service Tax (All)

 

Madam/Sir,

 

 

Subject:   Services provided by the Agricultural Produce Marketing Committee (APMC) /Board-- regarding.

 

 

            Representations have been received, seeking clarification regarding the levy of service tax on certain services provided by the Agricultural Produce Marketing Committee (APMC)/Board, using the market fee, in the light of Notification No.14/2004-ST. The representations have been examined. 

2.         APMCs are statutory bodies created with a view to regulate agricultural produce markets. APMCs charge market fee for issuing licenses to whole sale trader-cum-commission agent, wholesale traders, commission agent, mill / factory / cold storage owners or any other buyers of agricultural produce, for an agricultural year. The amount so collected by the APMC, from the licensees, is used for providing among other things facilities like roads, drinking water, weighing machines, storage places, street lights, etc. in the market area.  These services are not provided on one-to-one basis i.e. in consideration or as an obligation to the persons who have tendered the license fee. Some of these services may be capable of being used more conspicuously by the licensees but they do not form part of any contractual obligation to any of the licensees.

3.         Reportedly some field formations are inclined to take a view that services provided by the APMCs are in the nature of Business Support Service (BSS), and hence the exemption made available for BAS in relation to agriculture vide Notification No.14/2004-ST will not be applicable. As a consequence, service tax becomes leviable on the market fee popularly known as mandi shulk, collected by the APMC.

4.         When examined with reference to its constitution and functions, the services provided by APMC out of the market fee collected from the licensees, do not appropriately fall under the category of BSS.  The distinction between BSS and BAS is explained in the instructions dated 28.02.2006 issued from F.No.334/4/2006-TRU. In the light of the above instruction, the service provided by APMC out of the market fee is not in the nature of outsourced service.   It is not possible to hold that the licensees have outsourced the development and maintenance of agricultural market to the APMC, which could have been otherwise undertaken by them, solely in their business interest. Development and maintenance of agricultural market infrastructure undertaken by APMC in accordance with the statute, is for the benefit of all users, rather than an activity solely in the interest of licensees. Hence, APMC cannot be said to be rendering business support service to the licensees. Market fee is not in the nature of consideration for such BSS.

5.         As statutory bodies, APMCs provide basic facilities in the market area out of the market fee collected from the licensees, mainly to facilitate the farmers, purchasers and others. APMCs provide a host of services to the licensees in relation to the procurement of agricultural produce, which are inputs in terms of the definition given in section 65(19) of the Finance Act, 1994 itself. To that extent the meaning of input is much wider in scope than the meaning assigned in rule 2(k) of Cenvat Credit Rules, 2004. Therefore, it is clarified that the services provided by the APMC are classifiable as BAS and hence covered by the exemption under Notification 14/2004-ST.

6.         However, any other service provided by the APMCs for a separate charge(other than market fee) to either the licensees or farmers or any other person, e.g. renting of shops in the market area, etc. would be liable to tax under the respective taxable heads. This Circular may be communicated to the field formations and service tax assessees, through Public Notice/Trade Notice. Hindi version to follow.

 

(Samar Nanda)

Under Secretary, TRU

Tel/Fax: 011-23092037

--X--

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Team

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions