• By Notification No.11/2017-Central Tax ( Rate) Dated 28th June , 2017 following services listed at entry no. 24 have been exempted :

“24 ( Heading 9986) Support services to agriculture , forestry , fishing , animal husbandry.

Explanation : “Support services to agriculture , forestry , fishing , animal husbandry ” mean –

(i) Services relating to cultivation of plants and rearing of all life animals , except the rearing of horses , for food , fibre , fuel , raw material or other similar products or agricultural produce by way of –

 (a) agricultural operation directly related to production of any agricultural produce including cultivation , harvesting , thrashing , plant production or testing;

(b) supply of farm labour;

(c) process carried out at an 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 the essential characteristics of agricultural produce but make it marketable for the primary market ;

(d) renting of leasing of agro machinery or vacant land with or without a structure incidental to its use ;

(e) loading , unloading , packing , storage or warehousing of agricultural produce;

(f) agricultural extensions services;

(g)services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce .

(ii) Services by way of pre-conditioning , pre-cooling , ripening , waxing , retail packing , labeling of fruits and vegetables which do not change or alter essential characteristics of the said fruits or vegetables.

(iii) Carrying out an intermediate production process as job work in relation to cultivation of plants and rearing of all life forms of animals , except rearing of horses , for food , fibre , fuel, raw material or other similar products or agricultural produce .”

  • It is also pertinent to note that in this Notification at serial no. 4. Explanation  by clause (vi) and (vii) “agricultural extension” and “agricultural produce” have been defined as under :

(vi) “agricultural extension ” means application of scientific research and knowledge to agricultural practices through farmer education or training .

(vii) ” agricultural produce ” means any produce out of 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 , 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 by make it marketable for primary market . “

  • It is also pertinent to note that in Webster’s Unabridged Dictionary “food” has been defined as ” any nourishing substance that is eaten , drunk or otherwise taken into the body to sustain life , provide energy , promote growth etc. “
  • It is quite evident that rearing of cows and buffalos will fall in the ambit of ” rearing of  all life animals , except the rearing of horses ” and milk will fall in the ambit of “agricultural produce ” by virtue of being the produce out of rearing of cows and buffalos. Also chilling of milk will fall in the ambit of process of cooling carried out to make it marketable without altering its essential characteristics , However as per clause (i)(c) of aforesaid Explanation of  entry 24 , such process has to be carried out at the agricultural farm . In the context of milk “agricultural farm ” will assign the meaning – ‘the premises or place where rearing of cows or buffalos is done’ . However in clause (i)(d) services relating to loading , unloading , packaging , storage or warehousing of agricultural produce ” have also been exempted . Thus services relating to storage of milk shall also enjoy exemption and it is quite evident that storage of milk is not possible without its chilling . Thus by virtue of this even if chilling of milk is done at a place other than “agricultural farm ” even then such services shall be exempt under the GST regime .
  • It is also quite evident that services relating to loading , unloading , and packing of milk shall also enjoy exemption .
  • It is amply clear that storage and warehousing of agricultural produce shall also enjoy exemption under the GST regime .
  • However curd , butter etc derived from milk will not fall under the ambit of agricultural produce as has been defined under the aforesaid notification thus the support services as have been discussed above will not enjoy exemption in respect of such goods .

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