Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Is milk an agriculture produce ?

Service Tax - Started By: - Kunal Pawar - Dated:- 26-10-2015 Last Replied Date:- 5-1-2016 - 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. - Reply By Rajagopalan Ranganathan - The Reply = Sir,Milk is dairy product and not agricultural .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r - The Reply = Sir, Thanks for guidance. As per Section 65B(3) & 65B(5), definitions of agriculture and agriculture produce are as under :-Section 65B(3) - agriculture means the 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 &Section 65B (5) - agricultural produce means any produce of agriculture on which either no further processing is done or such processing is done as is usual .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. Please assist. - Reply By Ganeshan Kalyani - The Reply = The term milk is not mentioned in the exemption notification no.25/2012. Milk cannot be said as Agriculture produce. Therefore service is applicable. - Reply By KASTURI SETHI - The Reply = Kunal Pawar Ji, I have read your views expressed on 27.10.2015. Milk cannot be termed as agriculture produce by any stretch of imagination (practically, lawfully and as per dictionary meaning). There is a world of difference between the activity of  .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

agriculture produce' laid down under Section 65 B(3) & (5) of the Finance Act. - Reply By MARIAPPAN GOVINDARAJAN - The Reply = Dear Kasthuri Sethi Sir, your explanation and justification is superb. - Reply By Kunal Pawar - The Reply = Thanks a lot Kasturi Sethi Sir for necessary guidance. - Reply By KASTURI SETHI - The Reply = Shri MARIAPPAN GOVINDARAJAN JI, Thanks for liking and appreciating my reply. - Reply By Ganeshan Kalyani - The Reply = Nice explanation sir. - Reply By KASTURI SET .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd cattle feed are agriculture produce or not ? Food grains or not ? My reply is as under :- First of all we should know what is bran. What is chaff ? What is husk ? what is cattle feed ? What is milling ? During the process whether there is any change in essential character of the goods ? During milling whether any new product emerged ? What is bran ? As per dictionary meaning, Bran is the hard outer layers of cereal grain. It consists of the combined aleurone. Along with germ, it is an integra .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

;) As per dictionary meaning:- Chaff is the dry, scaly protective casings of the seeds of cereal grain, or similar fine, dry, scaly plant material such as scaly parts of flowers, or finely chopped straw. Chaff is indigestible by humans, but livestock can eat it and in agriculture it is used as livestock fodder, or is a waste material ploughed into the soil or burnt. HUSK and chaff are the same. What is milling ? Milling is a cutting process that uses a milling cutter to remove material from the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rovided by cold storage is outside the ambit of the levy. Doubts have been raised about the scope of term agricultural produce . In order to clarify the scope of this term beyond doubts, an order has been issued under the power vested under section 95 of the Finance Act (see Order No. 1/2002-S.T., dated 1-8-2002). As clarified in the order, the term agricultural produce would cover all cereals, pulses, fruits, nuts and vegetables, spices, copra, sugar cane, jaggery, raw vegetable fibres such as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g, harvesting, drying which does not alter its essential characteristics but makes it only marketable and includes all cereals, pulses, fruits, nuts and vegetables, spices, copra, sugar cane, jaggery, raw vegetable fibres such as cotton, flax, jute, indigo, unmanufactured tobacco, betel leaves, tendu leaves, rice, coffee and tea but does not include manufactured products such as sugar, edible oils, processed food and processed tobacco. ANALYSIS Bran is an integral part of the whole grain (may be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of goods (agriculture produce) nor any new product emerges as a result of milling. Bran is eaten by human being as well as animals. Biscuit of bran are available. Dalia is made of wheat and bran. Bran is not separate from wheat for dalia. All the items mentioned above are food grains (whether milled or not) and bran of these is complete food grain being more nutritious than wholegrain. Thus these are food grains as well as agriculture produce. Milling has done nothing except separating into thr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

because a new product has emerged. Basic essential character changed. After the manufacture of Sugar, there is by-product called bagasse. Bagasse can be compared to chaff or husk. Though bagasse has emerged after milling/crushing sugar cane, Hon ble Supreme Court in the case of Union of India Vs. DSCL SugarsLtd. 2015 reported as (322) E.L.T. 769 (S.C.) = 2015 (10) TMI 566 - SUPREME COURT has held that it is an un-manufactured product, being not result of any process. Despite being a bye-product .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

). I think there should not be even an iota of doubt or dispute that these are agriculture produce. Conclusion : By undergoing any process does not mean it is out of the gamut of agriculture produce. There are two major factors i.e. A new product must emerge and essential character of the goods must be altered to be out of natural product or agriculture produce. 2015 (322) E.L.T. 769 (S.C.) = 2015 (10) TMI 566 - SUPREME COURT IN THE SUPREME COURT OF INDIA A.K. Sikri and Rohinton Fali Nariman, JJ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

anks Kasturi Sir. - Reply By piyush agarwal - The Reply = Definition of agricultural produce as per Section 65B(5) 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 Definition of Agriculture as per Section 65B(3) Agriculture: As per section 65B(3) of the act, it means the cultivati .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or which does not alter its essential characteristics but makes it marketable for primary market . The process done by man or machine to produce rice does not alter the characteristics but only makes it marketable in primary market. Hence it is still agricultural produce. Further any process after procuring from primary market would stretch beyond agricultural definition and would be taxable. - Reply By piyush agarwal - The Reply = Circular No. 177/03/2014 - ST dated 17th February, 2014 clarifie .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

heat, rice, oats, barley etc. is edible for human beings as well as animal. It is eaten by animals direct and human beings eat by mixing with an other eatable item. Bran is agriculture produce though it undergoes some processes by machine or manually by farmers. I invite comments from all experts on my views expressed above. - Reply By KASTURI SETHI - The Reply = Assessee is concerned with relief. Govt has granted relief to the assessee by granting exemption from Service Tax in respect of rice v .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s, supply of machinery towards rice or commission on sale of rice are taxable service under service tax. - Reply By Ganeshan Kalyani - The Reply = Your second para seems not right as supply of labour for agricultural activity is exempt from service tax and so as other activity for agricultural purpose. - Reply By KASTURI SETHI - The Reply = I fully agree with Sh. Ganeshan Kalyani, Sir. But here Sh.Piyush Agarwal does not agree that rice is agriculture produce.Services by a commission agent for s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e been extended to rice. As per dictionary meaning, ' Paddy is a field flooded with water where rice is grown or a rice field.Paddy is agriculture produce and rice is not, it cannot be digested. Dictionary meaning of paddy cannot be changed or twisted. If we read the expression/term of 'Services relating to agriculture or agriculture produce under Section 66(D)(d)' between the lines, rice, bran and husk of paddy are either covered under the definition of 'agriculture produce' .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r threshing (Negative List) which changed the essential character of paddy. This is view of Sh.Piyush Agarwal. I do not agree with Sh.Piyush Agarwal on the following grounds:- (1) Services in relation to agriculture or agriculture produce are in the Negative List under Section 66(D)(d) of the Finance Act. As per para No.5 of Board's Circular dated 17.2.14.milling of paddy is an intermediate production process in relation to agriculture. What we obtain after milling of paddy ? These are rice, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e parts i.e. rice, bran and husk which already exist. No new product has emerged in this way.Paddy is only separated into three goods by way of milling/ threshing. All these three goods have not lost their individual identity or essential character at the time of milling paddy. They retain their original shape as they grew; only they were separated into three goods.Rice, bran and husk all are agriculture produce. 3. It is a fact that rice is not a manufactured product. Then what is it ? Rice, br .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

overed under the definition of 'agriculture produce' or in 'services relating to agriculture'. These are my views/interpretations. - Reply By piyush agarwal - The Reply = Respected Sethi & Kalyani Sir, I would like to draw your attentions on bold letters on Circular 177/03/2014 - ST dated 17th February, 2014 These doubts have arisen in the context of definition of 'agricultural produce' available in section 65B(5) of the Finance Act, 1994. The said definition covers & .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unloading, packing, storage and warehousing of rice are exempt from service tax being rice is food grain and these service are also exempted for agricultural produce. However, supplies of labours, supply of machinery towards rice or commission on sale of rice are taxable service under service tax for being food grain but these services would be EXEMPTED if rice would have been agricultural produce. Service relating to agriculture or agricultural produce by way of inter alia services provided by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ret 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. - Reply By KASTURI SETHI - The Reply = 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 ci .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

News: Notification Issued For GST Actionable Claim On Branded Food Products

News: GST Refund - Blockage of Working Capital of Exporters - earlier also there was a normal blockage of funds for a period of 5-6 months at least

News: Clarification about Transition Credit - ₹ 1.27 lakh crore of credit of Central Excise and Service Tax was lying as closing balance as on 30th June, 2017 - claim of credit of ₹ 65,000 crore is not unexpected

Article: 20 Things You must know about E Way Bills in GST Law

Article: MISTAKES IN DRAFTING

Forum: Duty Drawback- Urgent

Highlight: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg. - Circular

Highlight: The definition of "subsidiary company" or "subsidiary" u/s 2(87) of the Companies Act, 2013 shall come into force w.e.f. 20-9-2017

Highlight: Central Government notified the All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017 - Notification

Notification: All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017

Circular: Investment by Foreign Portfolio Investors in Corporate Debt Securities Review

Notification: Exemptions on supply of services under UTGST Act

Notification: Rates for supply of services under UTGST Act

Notification: Exemptions on supply of services under IGST Act

Notification: Rates for supply of services under IGST Act

Notification: List of Exempted supply of services under the CGST Act

Notification: Rates for supply of services under CGST Act

Highlight: Acceptance of deposits by companies from its members - conditions relaxed in case of Specified IFSC Public company and a private company - Rule 3 amended

Notification: Rate of exchange of conversion of the foreign currency with effect from 8th September, 2017

News: Tax Payers Advised To Confirm Identities Of Income Tax Search Authorities

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Forum: GST Invoice

Notification: The Customs and Central Excise Duties Drawback Rules, 2017

Circular: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg.

News: GST implementation smoother than expected: Jaitley

Forum: GST - TRAN1 - filed - Data uploaded with Remarks Processed with Error - Not coming in Electronic credit ledger - need suggession guidance

Forum: 3B mistake

Forum: Input tax credit

Forum: Excise duty credit on finished stock at additional place of business.

Forum: Due date of Filing TRAN-1

Highlight: Diversion of income at source - Joint venture agreement - 97% of the receipt transfer to M/s TRG Industries (P) Ltd. - scope of the agreement - it is diversion by overriding title - not taxable in the hands of assessee - HC

Highlight: Expenditure on eligible projects or schemes u/s 35AC - After 01.04.2017 the legislature desired to withdraw such deduction. - The Union legislature was competent to introduce such amendment - HC

Highlight: Transfer of trading assets at cost price, the profit component also stood transferred to the outgoing Directors, which otherwise belonged to the Company - the fact that AO has made the addition in the hands of the Directors would not make any difference - additions confirmed - HC

Highlight: The interest u/s 234B of the Act cannot go beyond the stage of S.245D(I) before the Settlement Commission - HC

Highlight: Galvanized iron pipe is a different commercial commodity than a iron pipe, therefore the activity of galvanization in our considered opinion amounts to manufacture - Deduction u/s 80-IB allowed - HC

Highlight: Penalty u/s 271C - non deduction of TDS on interest paid to sister concerns in terms of Section 194A - Levy of penalty confirmed - HC

Highlight: Disallowance of interest - reference to section 179 - The legislature has also recognised, that the doctrine of lifting of veil in the matter of tax dues is to be applied to prevent fraud etc. and not where the company has suffered despite its normal bona fide function. - HC

News: RBI Reference Rate for US $

Notification: Amendment in Notification No. S.O. 3118(E), dated the 3rd October, 2016

Highlight: Discount on ESOP to be allowed as business expenditure u/s 37(1), during the years of vesting on the basis of percentage of vesting during such period, subject to upward or downward adjustment at the time of exercise of option.

Notification: Central Government appoints the 20th September, 2017 as the date on which proviso to clause (87) of section 2 of the Companies Act 2013, shall come into force

Notification: Companies (Restriction on number of layers) Rules, 2017

Highlight: Penalty u/s 271(1)(c) - additional income disclosure - surrender of income post survey u/s 133A - he disclosure made by the assessee is voluntary in nature, in the revised return - no penalty

Highlight: Reopening of assessment - notice u/s 148 issued on the directions of JCIT / CIT - a perusal of reasons for initiating reassessment proceedings clearly show that they are against the sprit of provisions u/s 147

Highlight: MAT - Adjustment to book profit - computation u/clause (f) of Explanation-1 to section 115JB(2) is to be made without resorting to the computation as contemplated u/s 14A r.w.Rule 8D of I.T. Rules.

Highlight: Addition on account of alleged suppression of service value received - the addition made simply believing the Form 26AS will be an arbitrary exercise of power which cannot be sustained

Notification: Exempts intra state supply of heavy water and nuclear fuels from DAE to NPCIL

Notification: Seeks to amend notification No. 12/2017-UTT(R) to exempt right to admission to the events organised under FIFA U-17 World Cup 2017

Notification: Seeks to amend notification No. 11/2017- UTT(R) to reduce CGST rate on specified supplies of Works Contract Services

Highlight: Liability to pay duty on import of software - Though no authorization was given by the appellant to DHL, it is an undisputed position that the software has, in fact, been ordered by the appellant and have been delivered to them by DHL - the appellant is to be considered as the importer



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version