# Agriculture Related Services — Entry 54

## Coverage

Services relating to cultivation of plants and rearing of all life forms of animals (except horses) — for food, fibre, fuel, raw material, or similar products, or agricultural produce — by way of:

Sub-clause	Service
(a)	Agricultural operations directly related to production — cultivation, harvesting, threshing, plant protection, testing
(b)	Supply of farm labour
(c)	Farm-level processes — tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun-drying, fumigating, curing, sorting, grading, cooling, bulk packaging (which do not alter essential characteristics but make produce marketable for the primary market)
(d)	Renting/leasing of agro machinery, or vacant land with/without a structure incidental to its use
(e)	Loading, unloading, packing, storage or warehousing of agricultural produce
(f)	Agricultural extension services
(g)	Services by any Agricultural Produce Marketing Committee (APMC) or Board, or services by a commission agent for sale/purchase of agricultural produce

## Includes Cultivation/Rearing of

Pisciculture (fish breeding), sericulture (silk worm rearing), floriculture, horticulture, forestry.

## Key Definitions

Agricultural produce — Produce out of cultivation of land or rearing of animals (except horses) on which either no further processing is done or such processing is done as is usually done by the cultivator/producer which does not alter its essential characteristics but makes it marketable for the primary market.
Agricultural extension services — Application of scientific research and knowledge to agriculture through farmer education (training, call centres, farm visits, trials, melas, clubs, bulletins).

## Exempt vs. Taxable Processing

Exempt (Entry 54)	Taxable
Drying, cleaning, sorting, grading, bulk packaging	Potatoes → chips; tomatoes → ketchup
Sun-drying, fumigating, curing	Grinding, sterilizing, extraction, retail packaging
Cooling, threshing	Processes making produce retail-market ready

## Specific Items — Treated as Agricultural Produce or NOT

Item	Agricultural Produce?
Green tea leaves	Yes
Processed tea (black, green, white) / processed coffee beans/powder	No (factory-level processes)
Whole grains — gram, rajma	Yes
Dehusked/split pulses (dal)	No (processed by millers)
Sugarcane	Yes
Jaggery	No (alters essential characteristics)
Processed spices, dry fruits, cashew nuts	No

## APMC Services

Exempt (under (g)) — providing sheds, water, electricity, grading; preventing sale below MSP; collecting market fees, license fees, rents from licensees.
Taxable — APMC services unrelated to cultivation/rearing (e.g., renting out commercial property).

Worked example

### Example 1

Example: A cold storage facility stores fresh tomatoes for a farmer. → Exempt under Entry 54(e) — storage of agricultural produce.

### Example 2

Example: A rice miller dehusks and polishes paddy into rice. → Taxable — alters essential characteristics; not at farm level.

### Example 3

Example: A warehouse stores processed tea bags. → Taxable — processed tea is not 'agricultural produce'.

### Example 4

Example: APMC charges market fee to traders for using its mandi yard. → Exempt under Entry 54(g).

### Example 5

Example: APMC rents out a commercial showroom inside its complex. → Taxable — not related to marketing of agricultural produce.

⚠️ Common exam mistakes

Treating storage of processed items (tea, coffee, jaggery, dal) as exempt — these are not 'agricultural produce'.
Confusing 'primary market' (mandi/wholesale) processes with 'retail market' processes — only the former qualify.
Including rearing of horses in the exemption — horses are specifically excluded.
Treating all APMC services as exempt — commercial activities unrelated to agriculture are taxable.
Missing that processes which 'alter essential characteristics' (e.g., potato → chips) are taxable even if done on the farm.

Bare-Act text Entry 54 · Notification No. 12/2017-CT(R) dated 28.06.2017 · click to expand

Services relating to cultivation of plants and rearing of all life forms of animals, except rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce by way of— (a) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; (b) supply of farm labour; (c) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter essential characteristics of agricultural produce but make it only marketable for the primary market; (d) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use; (e) loading, unloading, packing, storage or warehousing of agricultural produce; (f) agricultural extension services; (g) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce.

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Agriculture Related Services — Cultivation, Farm Processes & APMC (Entry 54)

Worked example

⚠️ Common exam mistakes