Thursday, January 23, 2014

Service tax on services provided in respect of Rice and Ginned/baled Cotton

Finance Minister has clarified that rice and ginned/baled cotton is not an “Agricultural Produce” as defined under Section 65B (5) of the Finance Act, 1994 accordingly service tax is applicable  on following services provided in respect of Rice and Ginned/baled Cotton under Negative List approach:-
Ø  Related to production including cultivation, harvesting, threshing, plant protection or seed testing; or
Ø  Related to Processes carried out at an agricultural farm make it only marketable for the primary market which do not alter the essential characteristics of    agricultural produce; or
Ø  Related to loading, unloading, packing, storage or warehousing of agricultural produce; or
Ø  Services related to construction, erection, commissioning, or installation of original works pertaining to post- harvest storage infrastructure for agricultural produce including a cold storages for such agriculture produce.