Finance Minister 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 service tax
is applicable on following services
provided in respect of Rice and Ginned/baled Cotton under Negative List
approach:-
Ø Related to production including cultivation,
harvesting, threshing, plant protection or seed testing; or
Ø Related to Processes carried out at an
agricultural farm make it only marketable for the primary market which do not
alter the essential characteristics of agricultural produce;
or
Ø Related to loading, unloading, packing,
storage or warehousing of agricultural produce; or
Ø Services related to construction, erection,
commissioning, or installation of original works pertaining to post- harvest
storage infrastructure for agricultural produce including a cold storages for
such agriculture produce.
