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

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.... Principal Commissioners/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 ....

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.... ancillary activities. Testing cannot be random, somebody has to register for  testing. If certificate is not received and seeds are not tagged, testing is 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 '....