Is milk an agriculture produce ?, Service Tax

[Kunal Pawar]

Whether commission received on account of collection and supply of milk to Dairies taxable under BAS. If milk considered as agriculture produce, it is exempted being includes in negative list. However, nowhere in the definition of Agriculture produce, it is clearly mentioned that milk is an agriculture produce.

Posts / Replies

[Ganeshan Kalyani]

Out of my experience I would like to state that law is based on how you interpret it. It is also true that Gvt cannot be generous in giving away all benefits. But the law is always good in giving the best to its citizen. Hence I would request you accept the fact and enjoy the life. Thanks.

[KASTURI SETHI]

w.r.t. Sh.Piyush Agarwal's views, I would like to further point out that Board's circulars have no statutory force. It is a fact that Act/Rules will prevail over circular. Jaggery has been declared as agriculture produce vide Board's circular No.B.11/1/2002/TRU dated 1.8.2002 and Notification No.8/2004-ST dated 9.7.2004 whereas it is manufactured product. Jaggery is manufactured out of sugarcane. Sugarcane undergoes so many processes i.e. crushing /squeezing by machine, boiling the juice, filtering and drying and then a new product is emerged.Jaggery cannot be agriculture produce like sugar which is manufactured product. Both circular and notification are still in force. This aspect has not been touched till date. Both should have either been amended or withdrawn from 1.7.12 keeping in view the changes/amendments in Service Tax at large scale effective from 1.7.2012

I mean to say Board's circular is challengeable and not final. The Apex Court has also held that Board's circular which is contrary to law is not binding on the departmental officers.

Definition of 'agriculture' under Section 65 B(3) is also defective. "rearing of all life-forms of animals, except the rearing of horses,--------------" Why the horses have been excluded from the definition of agriculture ? There are so many animals whose body parts or hair etc. are not useful at all and all those should have been excluded. What is the basis of excluding horses from the definition of agriculture ? This definition should also be amended and it will be amended only when SCNs are issued due to defective definition.

Paddy is exempted and rice is taxable What is logic ? The ultimate purpose of exemption to paddy is defeated by excluding rice from the definition of agriculture produce. After all human beings eat rice which is major part of paddy and rice is food grain. bran of rice is also useful. Husk is of no use. Circular is defective.

 

 

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

Board's circular dated 17.2.14 has created confusion and not Sh.Piyush Agarwal. However, all of three have given sufficient material (or you may say foundation) to SH. MARIAPPAN GOVINDARAJAN, (an architect of more than 1000 articles on this site alone) to write an article for onward transmission to the Board to dispel confusions. Ball is in his court now.

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[Ganeshan Kalyani]

Fully agree with you. Thank you and thanks to Mr. Kunal Pawar who posted the initial query in this Issue ID and thanks to Mr. Piyush Agarwal for healthy discussion on the subject. Thanks for enriching my knowledge.

[piyush agarwal]

Thank you Sethi Sir & Kalyani Sir for sharing your knowledge with us. It was my pleasure to have great discussion with you all.

Thanks.