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CONTRONYMS IN TAXATION-RICE AND GST By G. Jayaprakash Advocate

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CONTRONYMS IN TAXATION-RICE AND GST By G. Jayaprakash Advocate
Jayaprakash Gopinathan By: Jayaprakash Gopinathan
August 2, 2022
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Words being its own antonyms are called Contronyms. For example “Sanction denotes both ‘a penalty for disobeying a law ‘ and  ‘official permission or approval for an action’. Speeches of political leaders on taxation of commodities, Services, Income etc attains the status of a Contronym when the political dispensations swap the ruling and opposition benches. The recent inclusion of rice within the ambit of GST which is the new reason for the members of opposition parties to stall the proceedings in Parliament is also appears that it can be termed as an example of Contronym. Eminent jurists as teachers of law taught their students- History not only informs, it also allow to interpret. This paper- a bit of history- is about an adamant Finance Minister of UPA to impose Service Tax on loading, unloading and stacking of Rice and about a Chief Minister of a state who thwarted the attempt to impose Service Tax on loading, unloading and stacking of Rice as a prelude to the GST regime.

In a recent press meet, the Hon’ble Chief Minister of Kerala announced that Kerala won’t be a party to the new levy of GST on pulses sold in packages.  Later the Hon’ble Finance Minister of Kerala clarified the limitations and assured that the State will not collect GST on retail sale of rice and pulses sold out in loose form [ F.No. 190354/172/2022-TRU-CBIC Dated 17.07.2022].The words of the Hon’ble  Chief Minister of Kerala reminded me about the intervention of another Chief Minister, the Chief Minister of Tamil Nadu Hon’ble Smt (Late) J. Jayalalithaa during the last days of the UPA Government when Service Tax was imposed w.e.from 1.7.2012 on loading, unloading and stacking of Rice, denying classification of Rice as an agriculture produce and thus fastened the levy of Service Tax on such services.  The Hon’ble Chief Minister in the D O letter also expressed in strong words the opposition of the state to impose GST on rice either directly or indirectly.

 The issue of Service Tax levy for  loading, unloading and stacking of rice was brought to the Notice of the then Finance Minister Shri P.Chidambaram by the then Minister of State Shri K.V.Thomas, Minister of State (Independent Charge), Consumer Affairs and Public distribution system, Government of India who had made a request for withdrawal of Service Tax on loading, unloading and stacking  of rice on behalf of Food Corporation of India and Central Warehousing Corporation. However the then Finance Minister Shri P.Chidambaram,   refused to withdraw the levy of Service Tax on loading, unloading and stacking of Rice citing the ensuing GST era in which every supply ( activity) , they want to bring under the ambit of GST. 

This paper writer had an occasion to examine the interpretation brought out by the then Finance Minister of India to deny the Negative List status (outside the ambit of Service Tax) to Rice  while retaining wheat within the Negative list because of being accepted as an  agriculture products. A paper, “Service Tax -Isn't Rice an Agricultural produce?” was published on 14th January 2014 in Tax India Online.  The paper advocated that the loading, unloading and stacking of Rice is in parimateria with wheat since both are agriculture produce and different treatment to rice is not justifiable. The paper also incorporated  the letter written by Shri K.V.Thomas’, Minister of State (Independent Charge), Consumer Affairs and Public distribution system, Government of India requesting to withdraw service tax on loading, unloading and stacking of Rice  and the reply of  Finance Minister, Government of India Shri P Chidambaram refusing to consider the request of withdrawal of Service Tax on loading, unloading and stacking of Rice.

On 12th February 2014, the Director, Information and Public Relations, Government of Tamil Nadu issued a press release about a D.O letter dated 10.02.2014  written by Selvi. J.Jayalalithaa, the then Hon’ble Chief Minister of TamilNadu to the Hon’ble Prime Minister of India Shri Manmohan Singh explaining  the “ invidious, discriminatory and completely unjust situation that has arisen as a result of an extremely insensitive and regressive interpretation of certain provisions of the Service Tax legislation, which has made the services like storage and handling associated with Rice liable to levy of Service Tax”. All the National and Regional papers published from TamilNadu highlighted the letter written by the then Hon’ble Chief Minister to the then Hon’ble Prime Minister in its front pages.

After the receipt of the D.O letter from the then Hon’ble Chief Minister of Tamil Nadu, the then Hon’ble Prime minister intervened in the matter and Notification 04/2014-ST dated 17.02.2014 was issued to grant exemption from levy of Service Tax for the activity of  loading, unloading and stacking of Rice.

Exemption to loading, unloading, packing, storage and warehousing of rice and Services provide by Cord Blood Banks for Service Tax - Amendment to Notification No. 25/2012-S.T.

In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 25/2012-Service Tax, dated the 20th June, 2012, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (i), vide G.S.R. 467(E), dated the 20th June, 2012, namely :-

In the said notification, in the opening paragraph, -

(i)after entry 2, the following entry shall be inserted, namely :-

“2A.Services provided by cord blood banks by way of preservation of stem cells or any other service in relation to such preservation;”;

(ii)after entry 39, the following entry shall be inserted, namely :-

“40.Services by way of loading, unloading, packing, storage or warehousing of rice.”.

[Notification No. 4/2014-S.T., dated 17-2-2014]

 Ordinary people are unable to comprehend the present agitation against GST on Rice by those who had made ground for its imposition way back in 2014. The words now they utter are nothing but CONTRONYMS.

 

By: Jayaprakash Gopinathan - August 2, 2022

 

 

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