Exemption to poultry and related services - egg hatching etc

[MURALIKRISHNA BODDAPATI]

Opinion is sought from learned forum members about the exemption to poultry activity under the negative list vide Sec 65B(3). Here Agriculture is defined to mean the cultivation of plants and rearing of all life forms of animals, except rearing of horses, for food, fibre, fule, raw material or other similar products.In addition, the Educational Guidance Note of CBEC has expressed a view that activities like breeding of fish ( pisciculture), rearing of silk worms ( sericulture), cultivation of ornamental flowers ( fliriculture) and horticulture, forestry are included in the definition of agriculture. Hence in the context of Service Tax, agricultural produce includes ' vegetable produe' as well as 'non agricultural produce' .

Hence it follows by principles of natural justice that hatching of eggs produced by hens into day old chicks which is the central activity in poultry breeding shall qualify for exemption under the negative list. I request the considered views of learned Tax Advocates and Chartered Accountants on this issue.

AI Summary

Agriculture definition may include poultry, but poultry services lack explicit negative-list entry and remain taxable.
Section 65B(3) defines agriculture to include rearing of animals, and an administrative note treats certain animal-breeding activities as agricultural; however, Section 66D(d) negative-list exemptions and the mega exemption notification do not expressly include poultry or egg-hatching, and administrative guidance lacks statutory force, so poultry and related hatching services are not treated as exempt and remain taxable absent specific inclusion.