TaxTMI 
TaxTMI 
Whether commission received on account of collection and supply of milk to Dairies taxable under BAS. If milk considered as agriculture produce, it is exempted being includes in negative list. However, nowhere in the definition of Agriculture produce, it is clearly mentioned that milk is an agriculture produce.
Is milk an agriculture produce ?
26 Oct 2015 
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Definition of agricultural produce: whether milk is covered affects service tax exemption for services connected to its supply.
Whether milk qualifies as agricultural produce under the statutory definitions is contested: Section 65B treats agriculture to include rearing of animals and defines agricultural produce as items on which only customary processing that does not alter essential characteristics has been done. The discussion contrasts views holding milk to be a dairy product outside the negative list with views relying on the statutory test that processing must produce a new product or alter essential character to exclude an item, and examines analogous controversies over paddy, rice, bran and husk and administrative circulars extending or limiting exemptions. (AI Summary)
Whether milk qualifies as agricultural produce under the statutory definitions is contested: Section 65B treats agriculture to include rearing of animals and defines agricultural produce as items on which only customary processing that does not alter essential characteristics has been done. The discussion contrasts views holding milk to be a dairy product outside the negative list with views relying on the statutory test that processing must produce a new product or alter essential character to exclude an item, and examines analogous controversies over paddy, rice, bran and husk and administrative circulars extending or limiting exemptions. (AI Summary)