Clarification regarding leviability of service tax in respect of Seed Testing with effect from 01.07.2012

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..... ioners/Commissioners of Central Excise and Service Tax (All) Principal Commissioners/Commissioners of Service Tax (All) Principal Commissioners/Commissioners LTU/Central excise/Service Tax (Audit) Madam/Sir, Sub: Clarification regarding leviability of service tax in respect of Seed Testing with effect from 01.07.2012-reg. It has come to the notice of the Board that certain field formations have taken a view that all activities incidental to seed testing are leviable to service tax and only the activity in so far it relates to actual testing has been exempted in the Negative List. 2. The matter has been examined. In this regard, Negative list entry under Clause (d) of section 66D of the Finance Act, 1994 is repr .....

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..... irrelevant. Therefore, all processes are a part of the composite process and cannot be separated from testing. 2.4 Agricultural operations have not been defined in the Chapter V of the Finance Act, 1994 and an inclusive and indicative list of such operations has been given. Thus it has been defined as Agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing . The exemption is thus not limited to the specified operations. The word seed from testing in agricultural operations was deleted so as to broaden the scope of coverage of the negative list entry and to cover any testing in agricultural operations in negative list, w .....

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..... will allow the benefit to all other testing in relation to agriculture or agricultural produce . 4. In view of the above, it is clarified that all testing and ancillary activities to testing such as seed certification, technical inspection, technical testing, analysis, tagging of seeds, rendered during testing of seeds, are covered within the meaning of testing as mentioned in sub-clause (i) of clause (d) of section 66D of the Finance Act, 1994 . Therefore, such services are not liable to Service Tax under section 66B of the Finance Act, 1994 . (i) All concerned are requested to acknowledge the receipt of this circular. (ii) Difficulty if any, in the implementation of the circular should be brough .....

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