Rice and Ginned _ baled Cotton not an Agricultural Produce
Recently, Union Finance Minister P. Chidambaram, in a letter to Union Minister of State for Consumer affairs K.V. Thomas, 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 under Negative List approach service tax is applicable, inter alia, on following services provided in respect of Rice and Ginned/baled Cotton:- Services related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or seed testing; or
Processes carried out at an agricultural farm which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market; or loading, unloading, packing, storage or warehousing of agricultural produce; or
Services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce;
Services by way of construction, erection, commissioning, or installation of original works pertaining to post- harvest storage infrastructure for agricultural produce including a cold storages for such purposes. For detailed study of clarification please refer F No 354/114/2013- TRU dated 8 November 2013.