Subject:-
Levy of Service Tax under category of Clearing &
Forwarding Agents in
respect of ‘Adhatiyas’ - reg.
Trade is aware that under Section 65 of the Finance Act, 1994 and as brought out by Board’s letter no. F.B.43/7/97-TRU dated 11.7.1997 there must exist a relationship of principal and an agent for bringing grain agent in the ambit of C&F Agent of the farmer and in CBEC Circular no. 48/10/2002-ST dated 13/9/2002, it has been clarified that Adhatiya’s (Food Grain Agents) activity do not fall under the scope of Clearing & Forwarding Agents services and hence would not be liable for service tax under this category. In this context it is clarified that the Circular issued is a general circular and is not with reference to any state or class of Adhatiyas. It has come to notice that various trade associations in Maharashtra specifically have misinterpreted the circular to apply only to the state of Rajasthan. In fact reference to Rajasthan and section 75 of the Rajasthan Agricultural Marketing Products Act, 1954 is only to explain the situation.
It is further clarified that, the activity of grain agent is covered under the service of ‘Commission Agent’ falling under the purview of ‘Business Auxiliary Services’, which has come into force from 1st July 2003. Commission Agents as per the definition are covered under the Notification No: 13/2003-ST dated 20th June 2003 and are exempt from Service Tax.
All trade associations are requested to give wide publicity to the contents of this Trade Notice amongst their members / constituents.
(ANITA SAHNI)
COMMISSIONER
CENTRAL EXCISE DELHI-II
Authority : CBEC Circular No: 73/3/2004-ST dated 5th January 2004 F.No: 159/3/2003 CX-4