What Agricultural Services are covered in Negative List?

  • Agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing
  • (Activities like breeding of fish (Pisciculture), rearing of silk worms (sericulture), cultivation of ornamental flowers (floriculture) and horticulture, forestry are included in the definition of agriculture. Planting of rubber, tea, coffee also covered in definition of negative list)
  • Supply of farm labour
  • Processes which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market:
  • Renting or leasing of agro machiner y or vacant land with or without a structure incidental to its use:
  • Loading, unloading, packing, storage or warehousing of agricultural produce
  • Agricultural extension services (it means applying scientific practices to agriculture and training and education of farmers)
  • Services by any Agricultural Produce Marketing Committee or Board
  • Services provided by a commission agent for sale or purchase of agricultural produce:

 

However following activities taxable

  • Process which alters the essential characteristics of the agricultural produce:
  • (example making potato chips out of potato, tomato ketchup out of tomato
  • Process which makes agricultural produce marketable in the retail market:
  • (like packing, grinding in retail packs etc )
  • Agricultural produce includes Rice but excludes paddy. Hence processing of rice from paddy is taxable.

Circular No.177/03/2014 ST dated 17.02.2014

 

 

Agriculture means the
cultivation of plants and rearing of all life-forms of animals, except the rearing of horses,
for food, fibre, fuel, raw material or other similar products.

 

 

QUESTIONS

Question 3
‘Big Agro Handlers’ furnishes the following details with respect to the services provided by them in the month of June, 2014:

(i) Supply of farm labour 58,000

View Answer

 

(ii) Warehousing of biscuits 1,65,000

View Answer

 

(iii) Sale of rice on commission basis 68,000

View Answer

 

(iv) Training of farmers on use of new pesticides and fertilizers developed through scientific research 10,000

View Answer

 

(v) Renting of vacant land to a stud farm 1,31,500

View Answer

 

(vi) Testing undertaken for soil of a farm land 1,21,500

View Answer

 

(vii) Leasing of vacant land to a dairy farm 83,500

View Answer

 

Question 4
Reliable Agro Industries Ltd. furnishes the details of various services provided by it in the month of May, 2014 as under:

1. Supply of farm labour 55,000

View Answer

 

2. Warehousing of refined vegetable oil 1,25,000

View Answer

 

3. Sale of wheat on commission basis 60,000

View Answer

 

4. Giving trucks on hire (without transferring the right to use) for transport of minerals 2,50,000

View Answer

 

5.Leasing of vacant land to a stud farm 30,000

View Answer

 

6. Renting of farmhouse for marriage and birthday parties 45,000

View Answer

 

7. Dehusking of paddy in rice mill on job work basis 32,000

View Answer

 

  1. Service Tax
  2. Basic Concepts of Service Tax
Ask Download

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides GST and Tax E-filinf training in Delhi. Register now.