Agriculture Exemptions: Entries 54 to 58 and "Agricultural Produce"

Agriculture Exemptions explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Almost every dispute in the agriculture exemptions is really a dispute about one definition. Entry 54 is wide, but it only reaches supplies "relating to cultivation of plants" and, in several limbs, only to agricultural produce — and the definition of that term stops well short of what a farmer would call his crop after processing.

Entry 54 exempts services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products — through nine limbs covering agricultural operations, supply of farm labour, specified processes, machinery on hire, warehousing, agricultural extension, APMC or Board services, and services by a commission agent. Para 2(d) defines "agricultural produce" as produce out of cultivation of plants or rearing of animals "on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market."

The definition that decides everything

Para 2(d) has two limbs, and the second is where cases are won and lost:

• no further processing is done; or
• processing "as is usually done by a cultivator or producer" which does not alter essential characteristics but makes it marketable for primary market.

Three cumulative conditions in the second limb. The processing must be usually done by a cultivator or producer — not by a separate trade; it must not alter essential characteristics; and it must make the produce marketable for the primary market — not a retail or consumer market.

Circular No. 16/16/2017-GST dated 15.11.2017 applies the definition to the hard cases:

"processed products such as tea (i.e. black tea, white tea etc.), processed coffee beans or powder, pulses (de-husked or split), jaggery, processed spices, processed dry fruits, processed cashew nuts etc. fall outside the definition of agricultural produce… and therefore the exemption from GST is not available to their loading, packing, warehousing etc."

The reason is the primary market limb. Tea leaves plucked from a bush are agricultural produce; black tea has been through a manufacturing process that makes it marketable to a consumer market, not merely a primary one.

And the same circular clarifies the other side: "cereals, pulses, other agricultural produce which are not processed at all" keep the character.

The nine limbs of entry 54

Services relating to cultivation of plants and rearing of all life forms of animals — except the rearing of horses — for food, fibre, fuel, raw material or other similar products, 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 the 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;
• (h) services by way of fumigation in a warehouse of agricultural produce.

Note that "rearing of horses" is expressly excluded, so stud farm and racehorse services are outside the entry entirely.

And limb (c) repeats the definition's own language — "do not alter the essential characteristics… make it only marketable for the primary market" — so a process done at the farm is exempt on the same test that decides whether the output is agricultural produce.

The APMC and commission agent limb

Limb (g) covers two different suppliers:

The APMC or Board itself. Its services to persons using the market yard.

A commission agent for sale or purchase of agricultural produce. This is the arhtiya in a mandi — and the exemption is confined to agricultural produce as defined, so a commission agent dealing in processed pulses or jaggery is outside it on the Circular 16/16/2017 reasoning.

And the related RCM entry runs the other way. Under entry 5 of Notification No. 13/2017-CT(R), services supplied by an agriculturist by way of supply of raw cotton to a registered person are under reverse charge, and the agriculturist himself is not liable to register under section 23(1)(b). Agriculturists and reverse charge →

Entries 55 to 58, and the warehousing entries

• Entry 55 — artificial insemination of livestock other than horses;
• Entry 56 — services by way of slaughtering of animals;
• Entry 57 — services by way of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling of fruits and vegetables which do not change or alter the essential characteristics of the said fruits or vegetables;
• Entry 58 — services by the National Centre for Cold Chain Development under the Ministry of Agriculture, Cooperation and Farmer's Welfare by way of cold chain knowledge dissemination.

Entry 57 is a narrow but useful extension. It permits retail packing and labelling of fruits and vegetables — operations that would fail the "primary market" test in para 2(d) — provided essential characteristics are unchanged.

And the storage entries sit alongside:

• Entry 24 — services by way of loading, unloading, packing, storage or warehousing of rice;
• Entry 24A — services by way of warehousing of minor forest produce;
• Entry 24B — services by way of storage or warehousing of cereals, pulses, fruits, nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves, tendu leaves, coffee and tea — omitted by Notification No. 4/2022-CT(R) w.e.f. 18.07.2022.

Entry 24 is drafted for rice specifically because milled rice fails para 2(d) — hence a standalone entry rather than reliance on entry 54(e).

And the omission of entry 24B on 18.07.2022 matters. Storage and warehousing of the listed non-agricultural-produce commodities — jaggery, coffee, tea, unmanufactured tobacco — became taxable from that date. Any warehousing contract still treating them as exempt is running on a repealed entry.

Key takeaways

• Entry 54 exempts nine categories of service relating to cultivation of plants and rearing of animals, excluding the rearing of horses.
• "Agricultural produce" (para 2(d)) requires no processing, or processing usually done by a cultivator that does not alter essential characteristics and makes it marketable for the primary market.
• Per Circular No. 16/16/2017-GST, tea, processed coffee, de-husked or split pulses, jaggery, processed spices, dry fruits and cashew are not agricultural produce.
• Limb (g) exempts APMC/Board services and commission agents, but only for agricultural produce as defined.
• Entry 57 separately permits retail packing and labelling of fruits and vegetables where essential characteristics are unchanged.
• Entry 24 exempts loading, unloading, packing, storage and warehousing of rice.
• Entry 24B was omitted on 18.07.2022, taxing storage of jaggery, coffee, tea, tobacco and the other listed commodities.
• Entries 55, 56 and 58 cover artificial insemination other than for horses, slaughtering and NCCD cold chain knowledge dissemination.

Read next

• Exemptions in Transportation of Goods: Entries 18 to 23
• Business Support and Construction Exemption Entries
• Strict Construction, and the Burden of Proving an Exemption

Disclaimer: Positions stated as on 5 September 2026, based on entries 24, 24A, 24B, 54, 55, 56, 57 and 58 and para 2(d) of Notification No. 12/2017-Central Tax (Rate), Notification No. 4/2022-Central Tax (Rate), Circular No. 16/16/2017-GST dated 15 November 2017, entry 5 of Notification No. 13/2017-Central Tax (Rate) and section 23(1)(b) of the CGST Act, 2017, as reproduced in the ICAI Handbook on Exempted Supplies under GST (April 2025).