1. Following services relating to
agriculture or agricultural produce are specified in the negative list:
1. Agricultural operations directly
related to production of any agricultural produce including
cultivation, harvesting, threshing, plant protection or seed testing;
2. Supply of farm labour;
3. Processes carried out at the 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 essential characteristics
of agricultural produce but makes it only marketable for the primary
market;
4. Renting of agro machinery or
vacant land with or without a structure incidental to its use;
5. Loading, unloading, packing, storage and
warehousing of agricultural produce;
6. agricultural extension services;
7. services provided by any
Agricultural Produce Marketing Committee or Board or services provided
by commission agent for sale or purchase of agricultural produce.
2. Definition of
'agriculture'
'Agriculture' has been defined in
the Act as cultivation of plants and rearing or breeding of animals and other species
of life forms for foods, fibre, fuel, raw materials or other similar products but
does not include rearing of horses.
3. Definition of ‘agricultural produce’.
Agricultural produce has also
been defined in the Act which means any produce of agriculture on which either
no 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.
The process also includes
specified processes in the definition like tending, pruning, grading, sorting
etc. which may be carried out at the farm or elsewhere as long as they do not
alter the essential characteristics.
4. Definition of ‘ agricultural extension services’
Agricultural extension services
have been defined in the Act as application of scientific research and
knowledge to agricultural practices through farmer education or training.
5. Some illustrations:
1. Potato chips or tomato ketchup are
manufactured through processes which alter the essential characteristic of farm
produce (potatoes and tomatoes in this case).Therefore it is not an agricultural
produce.
2. Cleaning of wheat would be covered in
the negative list entry even if the same is done outside the farm.
3. Shelling of paddy would not be covered
in the negative list entry relating to agriculture as this process is never
done on a farm but in a rice sheller normally located away from the farm.
(However,
if shelling is done by way of a service i.e. on job work then the same would be
covered under the exemption relating
to 'carrying out of intermediate production process as job work in relation to
agriculture'.)
4. Agricultural
products like cereals, pulses, copra and jaggery be still be covered in
the ambit of 'agricultural produce' even though on these products certain amount of processing
is done by a person other than a cultivator or producer because such processing is done as is usually done by
the cultivator or producer which does not alter essential characteristics of
agricultural produce but make it marketable for primary market'.
5. Processes of grinding,
sterilizing, extraction packaging in retail packs of agricultural products,
which make the agricultural products marketable in retail market, would not be covered
in the negative list, because only
such processes are covered in the negative list which makes agricultural
produce marketable in the primary market.
6. Leasing of
vacant land with a green house or a storage shed meant for agricultural
produce is covered in the negative list.
7. Activities
like breeding of fish (pisciculture), rearing of silk worms (sericulture),
cultivation of ornamental flowers (floriculture) and horticulture,
forestry are coming under the definition of agriculture and is covered in
the negative list.
8. Plantation crops like rubber, tea or coffee
be also covered under agricultural produce and is covered in the negative list.
6. Services referred to in the negative list
entry pertaining to Agricultural Produce Marketing Committee or Board.
a. Agricultural
Produce Marketing Committees or Boards are set up under a State Law for purpose
of regulating the marketing of agricultural produce.
b. Such
marketing committees or boards have been set up in most of the States and
provide a variety of support services for facilitating the marketing of
agricultural produce by provision of facilities and amenities like, sheds,
water, light, electricity, grading facilities etc.
c. They
also take measures for prevention of sale or purchase of agricultural produce
below the minimum support price. APMCs collect market fees, license fees, rents
etc.
d.
Services provided by such Agricultural Produce Marketing Committee or Board are
covered in the negative list.
e. Services
are Taxable if any service provided by such bodies which is not directly related to
agriculture or agricultural produce. e.g. renting of shops or other
property.
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