SERVICE TAX TERMINOLOGY – PART-II

[Dr. Sanjiv Agarwal]

Agriculture and related terms (Clauses 3, 4, 5,  6 of new proposed Section 65B)

"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. (Clause 3)

 "agricultural extension" means application of scientific research and knowledge to agricultural practices through farmer education or training. (Clause 4)

"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 . (Clause 5)

"Agricultural Produce Marketing Committee or Board" means any committee or board constituted under a State law for the time being in force for the purpose of regulating the marketing of agricultural produce. (Clause 6)

Agriculture

According to Oxford Dictionary, agriculture is the science or practice of farming, including cultivation of the soil for the growing of crops and the rearing of animals to provide food, wool, and other products.

According to Wikipedia, agriculture (also called farming or husbandry) is the cultivation of animals, plants, fungi, and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the development of civilization. The study of agriculture is known as agricultural science. Agriculture generally speaking refers to human activities, although it is also observed in certain species of ant and termite.

‘Agriculture’ has been defined in the Act as cultivation of plants and rearing or breeding of animals and other species of life forms for foods, fibre, fuel, raw materials or other similar products but does not include rearing of horses.

Also, activities like breeding of fish  (pisciculture), rearing of silk worms (sericulture), cultivation of ornamental flowers (floriculture) and horticulture, forestry etc are included in the definition of agriculture.

Agricultural extension

Agricultural extension services have also been defined in section 65B of the Act as application of scientific research and knowledge to agricultural practices through farmer education or training.

Agricultural produce

Oxford Dictionary provides the following meaning –

Agricultural: relating to agriculture

Produce:

1. make or manufacture from components or raw materials
2. cause (a particular result or situation) to happen or exist
3. show or provide (something) for consideration, inspection, or use
4. administer the financial and managerial aspects of (a film or broadcast) or the staging of (a play, opera, etc.)

Wikipedia provides the following meaning -

Produce is a generalized term for a group of farm-produced goods, not limited to fruits and vegetables (i.e. meats, grains, oats, etc.). More specifically, the term "produce" often implies that the products are fresh and generally in the same state as where they were harvested. In supermarkets the term is also used to refer to the section where fruit and vegetables are kept. Produce is the main product sold by greengrocers, farmers' markets, and fruit markets.

‘Agricultural produce’ was also defined in Order No. 1/2002-ST dated 1.8.2002 for storage and warehousing services as follows –

“The expression “agricultural produce” means any produce resulting from cultivation or plantation, on which either no further processing is done or such processing is done by the cultivator like tending, pruning, cutting, harvesting, drying which does not alter its essential characteristics but make it only marketable and includes all cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute, etc., indigo, un-manufactured tobacco, betel leaves, tendu leaves, rice, coffee and tea but does not include manufactured products such as sugar, edible oils, processed food, processed tobacco”.

According to TRU clarification dated 16.3.2012, agricultural produce means any produce of agriculture on which either no 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. It also includes specified processes in the definition like tending, pruning, grading, sorting etc. which may be carried out at the farm or elsewhere as long as they do not alter the essential characteristics.

It also covers plantation crops like rubber, tea or coffee. In terms of the definition of agricultural produce, only such processing should be carried out as is usually done by cultivator producers which does not alter its essential characteristics but makes it marketable for primary market. Potato chips of tomato ketchup are manufactured through processes which alter the essential characteristic of farm produce (potatoes and tomatoes in this case).

"Agricultural Produce" means all produce whether processed or non-processed, manufactured or not, of agriculture, horticulture, plantation, animal husbandry, forest, sericulture, pisciculture and includes livestock or poultry as specified in the schedule." [Bihar Agricultural Produce Market Act, 1960, Section 2(1)(a) as cited in Lipton India Ltd., Calcutta v. Bihar State Agrl. MarkEting Board, AIR 1998Pat 58, 59.]

'Agricultural Produce' means all produce of agriculture, horticulture, animal husbandry, apiculture, pisciculture, or forest as specified in this Schedule [M.P. Krishi Upaj Mandi Adhiniyam, 197, S. 2(l)(a) as cited in Goyal & Sons v. Krishi Upaj Mandi Samittee, AIR 1998 MP 202, 204, para II]

  Agricultural produce is agricultural produce, whether it is stocked on the thrashing floor or stored in a house, or godown. Union Bank of India v. D. Venkataramaiah, AIR 1985 AP 375, 376. [Civil Procedure Code (5 of 1908), O. XXXVIII, R. 2]

 Foresttrees of spontaneous growth cannot be regarded as 'agricultural or horticultural produce grown' on land. M Ramakrishnaiah v. State of Andhra, AIR 1957 AP 28, 29. [Madras General Sales Tax Act (9 of ] 939), S. 2(] ), Proviso] the term 'agricultural produce' is not only confined to agricultural produce alone but also an industrial product by processing of agricultural produce.  Swagat Stores v. State, AIR 1993 Pat 82, 86. [Bihar Agricultural Produce Market Act, 1960  S.2(a)]

'Agricultural produce' means all produce 'whether processed or not' of agriculture, horticulture, animal husbandry, apiculture, pisciculture or forest as specified in the Schedule. [M.P. Krishi Upaj Mandi Adhiniyam (24 of 1973), S. 2(1)(a) as cited in D.G. Prasad Pathak v. Krishi Upaj Mandi Samiti, Jabalpur, AIR 2000 MP 15, 17, para 8] .

 

= = = = = = = =