Classification under Service Tax - Anti Termite Treatment of Land before construction, Service Tax

[Brijesh Verma]

Dear Experts,

Please help me in proper classification of Anti-termite treatment under Service Tax Law.

 

Such anti termite treatment is being done on land before construction starts. Whether it will come under section 65(24b) or under 65(25b).

 

(24b) "cleaning activity" means cleaning, including specialised cleaning services such as disinfecting, exterminating or sterilising of objects or premises, of -

       (i)  commercial or industrial buildings and premises thereof; or

       (ii)  factory, plant or machinery, tank or reservoir of such commercial or industrial buildings and premises thereof,

      but does not include such services in relation to agriculture, horticulture, animal husbandry or dairying

(25b) ²⁰["commercial or industrial construction"] means -

       (a) construction of a new building or a civil structure or a part thereof; or

       (b) construction of pipeline or conduit; or

       (c) completion and finishing services

Posts / Replies

[Naveed S]

Anti termite treatment can be broadly classified as under :

(a) Pre-construction termite treatment

(b)  Post-construction termite treatment.

In your case, the anti termite treatment is being done on land before construction starts. hence such services should fall under sub section 25 (b) (a), as it is an activity related to constrction of new building/structures.

Post-construction termite treatment. should fall under sub section 24 (i) as it is carried out on commercial building/premises already built/already existing.

This are my own personal view on the topic and same may/may not be correct.

[Brijesh Verma]

Thanks 

 

[MANDAVILLI RAMAKRISHNA]

 

What is the status of the land at the time of the treatment?

whether the land is commercial land or agricultural land?

whether the plans for construction were already approved and

whether the approval for conversion of agl. land for use of commercial purpose

taken?

what will be the project coming up in the land whether agro based or 

non agro based?

whether the project is relating to port or sez etc.,?

These are also important to decide first whether the service is taxable or not.

[Brijesh Verma]

Dear Mr. Mandavilli

 

What is the status of the land at the time of the treatment? -  Merely a piece of land on which pre construction digging has been done for making foundation i.e. the Neev

whether the land is commercial land or agricultural land? - Commercial

whether the plans for construction were already approved and - Already Approved

whether the approval for conversion of agl. land for use of commercial purpose

taken? NA

what will be the project coming up in the land whether agro based or 

non agro based? Non Agro

whether the project is relating to port or sez etc.,? NA

These are also important to decide first whether the service is taxable or not.

[MANDAVILLI RAMAKRISHNA]

Sir, thank you very much for your simplicity by answering to the question by a smallest consultant like me, which shows your curiosity to learn more.

Please go through the definition given in the service tax act for cleaning activity which is stating the taxable event only THE SERVICE IN RESPECT OF " BUILDINGS AND PREMISES THEREOF"

the meaning of " PREMISES" as per Oxford dictionary is:

noun

• a house or building, together with its land and outbuildings, occupied by a business or considered in an official context:
  

(24b) "cleaning activity" means cleaning, including specialised cleaning services such as disinfecting, exterminating or sterilising of objects or premises, of -

       (i)  commercial or industrial buildings and premises thereof; or

My opinion is as the construction is not yet started, no building is existing and no premises are existing at the time of service no tax is to be paid.

Regards

RK

[Naveed S]

In my above reply dated 20.10.2013, due to typing mistake, sub section 24 (i) should be read as sub section 24 (b) (i), 

[Brijesh Verma]

Thanks RK Sir

Even we carry the same view but had to be more strong in our opinion, in which you have certainly helped us.

In case we win the case, credit would definitely go to you too !!!

 

 

[Brijesh Verma]

Dear experts

 

Pls come forward with your views too

[Brijesh Verma]

I seriously need help in this case

[Ashok Jogalekar]

Going thru the meaning of of 24b or 25b the activity referred by you is not taxable, but , as no such activity appears in the negative list and since it is for preparing the land for construction for commercial purpose it is taxable .

[Brijesh Verma]

Resp Ashok Sahab

the case is for pre-Negative list era !!! SO if your opinion is concerned, we are non taxable. AM i correct sir.

[Ashok Jogalekar]

Yes, in my opinion it is not taxable pre-negative list era.