India is an agricultural-based economy, and GST has brought some significant changes in the taxation of goods and services in the agriculture sector. In this article, we will discuss the treatment of services relating to the Agricultural sector under GST.
GST stands for Goods and Services Tax, which is a comprehensive indirect tax levied on the supply of goods and services throughout India. It replaced many indirect taxes previously levied by the Central and State Governments.
The GST has subsumed taxes like Central Excise Duty, Service Tax, Additional Excise Duty, Countervailing Duty, Special Additional Duty of Customs, Value Added Tax (VAT), Central Sales Tax, Entry Tax, Entertainment Tax, Luxury Tax, and Advertisement Tax, among others.
The agricultural produce is exempt from GST. Agricultural produce includes cereals, fruits, vegetables, milk, eggs, meat, fish, seeds, and spices, among others. However, the exemption is not applicable to the processed agricultural products.
Processed agricultural products such as packaged fruits, vegetables, and other food items are taxed under GST. The GST rate for these products is 5%.
Services relating to the agricultural sector are taxable under GST as they are not covered under the definition of 'agricultural produce.' The GST rate for these services is 18%. Some of the taxable agricultural services are discussed below:
Storage and warehousing services are essential in the agricultural sector to store the produce safely. These services are taxable under GST at the rate of 18%. Farmers and traders who provide these services are required to register under GST and pay tax accordingly.
Transportation services are necessary for transporting the agricultural produce to the market. These services are also taxable under GST at the rate of 18%. However, transportation services provided by agricultural produce traders are exempt from GST.
Harvesting and planting services are also taxable under GST at the rate of 18%. Farmers who provide these services are required to register under GST and pay tax accordingly.
Consultancy and advisory services relating to agriculture are also taxable under GST at the rate of 18%. The services provided by agricultural experts, consultants, and advisory firms are taxable under GST.
GST has brought significant changes in the taxation of goods and services in the agriculture sector. Agricultural produce is exempt from GST, but the processed agricultural products and services relating to the agricultural sector are taxable under GST. Farmers and traders who provide these taxable services are required to register under GST and pay tax accordingly.
GST Rates and HSN Code for Tin Bars
Place of GST Registration for Renting of Immovable Property
Paper or Paperboard Labels: GST Rates and HSN Code 4821