Exemption To Agriculture sector [ Entry no. 24,24A,24B,54,55,55A,57 ] - GST Ready Reckoner - GST

Exemption To Agriculture sector Exemption Entry 24 Services by way of loading, unloading, packing, storage or warehousing of rice is exempt Scope The scope of the exemption is subject to some restrictions which can be easily understood from the following table: Who is eligible What specifically is exempt Limits for exemption. Any Person Services relating to - Loading, - unloading, - packing, - storage, or - warehousing. Specific activities in relation to Rice only is exempt. Explanation Storage : Means placing, accommodation, reservation, or safe keeping in store. Warehousing : Means the act of depositing goods in a warehouse. Example Raman has a business of rice storage, packing etc. and has provided service of, packing and storage or warehousing of rice such service shall be exempt. Exemption entry 24A 24B Services by way of warehousing of minor forest produce is exempt. [ Entry 24A ] Services by way of storage or warehousing of cereals, pulses, fruits and vegetables is exempt [ Entry 24B ] Few Clarifications Circular No. 177/09/2022-TRU clarifies Issues Held that Whether storage or warehousing of cotton in baled or ginned form is covered under entry 24B of Notification No. 12/2017-Central Tax (Rate) before 18.07.2022 it is clarified that service by way of storage or warehousing of cotton in ginned and or baled form was covered under entry 24B of notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 in the category of raw vegetable fibres such as cotton. It may however be noted that this exemption has been withdrawn w.e.f. 18.07.2022 Exemption Entry 55 Process of Job-worker Carrying out an intermediate production process as job work in relation to cultivation of plants and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 or agricultural produce is exempt. Scope The scope of the exemption is subject to some restrictions which can be easily understood from the following table: Who is eligible What specifically is exempt Limits for exemption. Job Worker Process in relation to cultivation of plants and rearing of all life forms of animals. Rearing of horses is not exempt . Explanation Job Worker means a person who gets raw material/intermediate goods from the principal manufacturer and carries out any process thereon. For the purpose of job work, 'principal' means a registered person who sends any inputs or capital goods, to a job worker for job-work. Circular No. 19 / 19 / 2017 -GST clarifies that Issues Held that Milling of paddy is not an intermediate production process in relation to cultivation of plants. It is a process carried out after the process of cultivation is over and paddy has been harvested. Further, processing of paddy into rice is not usually carried out by cultivators but by rice millers. Milling of paddy into rice also changes its essential characteristics. Therefore, milling of paddy into rice cannot be considered as an i ntermediate production process in relation to cultivation of plants for food, fibre or other similar products or agricultural produce. it is clarified that milling of paddy into rice is not eligible for exemption. Further milling of paddy into rice on job work basis, is liable to GST at the rate of 5%, on the processing charges (and not on the entire value of rice). Exemption entry 54 Services relating to 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 or agricultural produce by way of (a) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; (b) supply of farm labour; (c) processes 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 only marketable for the primary market; (d) renting or 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 extension 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. Explanation Agricultural extension means application of scientific research and knowledge to agricultural practices through farmer education or training; 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 but makes it marketable for primary market; 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 Scope Following activities are covered within the scope of agriculture Pisciculture - Breeding of fish Sericulture - Rearing of silk worms floriculture - cultivation of ornamental flowers Horticulture Forestry Example Praveen a farmer provides services relating to cultivation of seeds. This is exempt. Exemption Entry 55 A Services by way of artificial insemination of livestock (other than horses) is exempt Exemption Entry 57 Services by way of pre-conditioning, precooling, ripening, waxing, retail packing, labelling of fruits and vegetables which do not change or alter the essential characteristics of the said fruits or vegetables is exempt.