Clarification - exemption under notification no. 14/ 2004

[Prakash Bhandari]

My one of client( herein after called as job worker) is engaged in agri seed processing on behalf of some seed manufacturing companpy ( herein after called as principal company). Seeds and other inputs are provided by prinicipal company and the job worker is not using any input or other material, the processed seeds are packed and retured to principal company, in light of above kindly clarify the following 1. Will seed processing is under processing of goods on behlaf of client under business auxillary services and also look in the exemption under notification (14/2004 ST) dt. 10-9-2004 for agriculture as seeds will be use for selling to farmer and only use for agriculture purpose

[Surender Gupta]

In the exemption notification, word 'agriculture' has been used in loose term and have very wide implications. Therefore, apparently, you are entitled to avail the exemption.

AI Summary

Agricultural exemption applies to seed processing as job work, enabling relief under applicable service tax exemption notifications. Seed processing and packing performed by a job worker using seeds and inputs supplied by the principal, with finished seeds returned to the principal for agricultural sale, constitutes processing of goods on behalf; the exemption's reference to agriculture is applied broadly and the job worker appears entitled to the agricultural exemption under the notification.