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Activity of Loading--Unloading of Agriculture Produce--Taxability

Satyadev Purohit

The learned author examines taxability or otherwise of loading and unloading services provided in respect of agriculture produce under the currently applicable Negative List regime of taxation of services.

1. Taxability of agriculture or agricultural produce related services

Under the negative list regime of taxation of services, all services, other than those specified under the negative list within the meaning of section 66D of the Finance Act, 1994 (the Act) or those specified under Notification No. 25/2012-ST, dt. 20-6-2012 (Mega Exemption Notification), are chargeable to service tax.

As per clause (d) of section 66D of the Act, certain specified services rendered in respect of agriculture or agricultural produce are included under the negative list, hence same is not chargeable to service tax.

The term agriculture is defined under clause (3) of section 65B of the Act to mean 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.

As per clause (5) of section 65B of the Act agricultural produce means any produce of agriculture on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market.

2. Services covered by the Negative list

As per clause (d) of section 66D of the Act, services relating to agriculture or agricultural produce provided by way of the following are specified in the negative list, hence these services are not chargeable to service tax.

(i) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing;

(ii) supply of farm labour;

(iii) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market;

(iv) renting or leasing of agro-machinery or vacant land with or without a structure incidental to its use;

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