Page 11 - Ch8_ EXEMPTION

Compute the value of taxable service of 'Seed Farmer Association' for the month of May, 20XX. Assume
that the point of taxation in respect of all activities mentioned above falls in the month of May, 20XX

itself.
Answer:-
Computation of value of taxable service of 'Seed Farmer Association' for the month of May, 20XX:-
S.No. Particulars ₹ Remark

1 Cultivation of ornamental flowers - It is exempt as Floricultureis agricultural
activity
2 Packing of tomato ketchup 54,000 It is taxable as tomato ketchup is not agricultural
produce

3 Warehousing of potato chips &Biscuit 1,65,000 It is taxable as potato chips & Biscuit are not
agricultural produce
Sale of tea & rice on commission basis 68,000 Tea & Rice are not agricultural produce & thus,
4
(tea `18000 & rice `50000) their sale on commission basis is not exempted.

Packaging of pulses in retailpacks 45,000 This activity is taxable as it is not necessary to
5
make pulses marketable in primary market.

Training of farmers on use of scientific - These are Agricultural extension services & are
6
tools, Agro-machinery and use of new specifically exempted.
pesticides & fertilizers developed
through Scientific research
Leasing of vacant land to a stud farm 1,63,000 Rearing of all life-forms of animals except horses
7
(rearing of horses) is exempt.
8 Grading of wheat according to its - It does not alter essential characteristics of
quality Wheat but makes it marketable for primary
market & thus, exempt.

9 Testing of samples from plants for - Agricultural operations directly related to
pest detection production of anyagricultural produce including
testing is exempt.

10 Rearing of silk worms - Rearing of all life-forms of animals except
horses isexempt.
11 Supply of farm labour - It is specifically exempted.
12 Renting of Agro-machinery - It is specifically exempted.

13 Processing of Tomato ketchup & 3,00,000 Such processing alters essential characteristics
Potato Chips of tomato &Potato. They are not agricultural
produce & thus, taxable
14 Warehousing of minor forest produce - It is specifically exempted.
-
15 Warehousing of seasonal vegetables, It is specifically exempted.
fruits, cereals & pulses
Value of Taxable Services 7,95,000

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