TMI BlogAPPLICABILITY OF SERVICE TAX ON PLANTING THE TREESX X X X Extracts X X X X X X X X Extracts X X X X ..... APPLICABILITY OF SERVICE TAX ON PLANTING THE TREES - By: - KASTURI SETHI - Service Tax - Dated:- 24-9-2015 - - Applicability of Service Tax on the activity of planting trees who intends to plant trees for Gujarat Ecological Commission, fully Govt. organization of Gujarat State. After perusing all the services Specified in the Finance Act, 1994 (as amended), it is seen that this activity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planting trees has neither been specified in Negative List under Section 66 D of the Act nor in the list exempted services under Mega Exemption Notification No.25/12-ST dated 20.6.2012 effective from 1.7.2012 as amended vide Notification No.6/2015-ST dated 1.3.2015 (effective from 1.4.2015). Certain services provided to Govt., local authority or Govt. Authority have been exempted from paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Service Tax either by virtue of Mega Exemption Notification No.25/12-ST dated 20.6.2012 effective from 1.7.2012 as amended vide Notification No.6/2015-ST dated 1.3.2015 (effective from 1.4.2015). The scope of these exemptions was pruned vide Notification No.6/15-ST dated 1.3.2015 and still the following services provided to Govt. are exempted and these are as follows :- 12. Ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of - (a) omitted (b) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Archaeological Sites and Remains Act, 1958 (24 of 1958); (c) omitted (d) canal, dam or other irrigation works; (e) pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal; or (f) omitted Exemption to the services mentioned in above (d) (e) relate to water in different forms and with different purposes whether it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is water supply or water treatment or storage of water in the form of dam or canal. Similarly, draining out of dirty water sewerage system is absolutely necessary. So we can understand that water being vital for human life, has granted exemption to these services in public interest. The activity of planting trees on Govt. land has also not been included in serial No. 4 (relating to agriculture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or agriculture produce) of Negative List of Services under Section 66 D of the Finance Act . Thus this service is automatically classified/pushed to the category of Other Than Negative List specified in CBEC Circular No.165/16/12-ST dated 20.11.2012 . Other Than Negative list is a sea and pari materia to erstwhile tariff item no. 68 (All other Goods not elsewhere specified) of the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise Tariff Act. This tariff item 68 was called Terror Item 68 because whatever was left fitted in this classification. This T.I. 68 was created in 1975 and ultimately abolished in December, 1985 with the introduction of new Central Excise Tariff Act, 1985 . Similarly, there is no logic or legal sanctity in introducing Other Than Negative List . Every service should be specifically class ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified keeping in view description and nature of service. Whatever has been left to mention in the list of taxable services, that is to be treated under, Other Than Negative List notwithstanding description, nature of service, merits and demerits, pros. and cons. of any service, is not justified at all by any stretch of imagination.This Other Than Negative List should be abolished like erstwhil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e T.I.68. Keeping in view myriad benefits of planting the trees i.e. cleaning the air, providing oxygen, conserving energy, shielding from ultra violet rays, reducing global warming, preventive soil erosion etc. it can be concluded that this activity is as essential as water for human life. Moreover, planting trees is an eco-friendly act. In order to avoid unnecessary proceedings and litigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the CBEC should either insert this at Serial No.12 of Mega Exemption Notification No.25/12-ST dated 20.6.12 as amended vide Notification No.6/15-ST dated 1.3.2015 or in the serial no.4 of Negative List of services relating to Agriculture under Section 66 D of the Act in public interest. Trees are nature s boon and hence this activity should never be taxed. Planting trees fall under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e scope of horticulture and horticulture is branch of agriculture. Agriculture has been put under the Negative List under section 66 D but unless and until the word, Horticulture is specifically included in the category of agriculture, or at least planting the trees is inserted therein, the contractors who provides the service to Govt. by way of planting the trees have either to pay Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax or face flood of Show Cause Notices and hence avoidable litigation which is not in the interest of the nation. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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