Agricultural tractor on the main road – doesn’t lose status - CBEC
Agricultural tractors were exempted from duty in order to encourage farm sector. But what happens if a tractor strays away from the farm and into the main road? It has to be careful to avoid a Central Excise Superintendent! This is not that easy with so many Superintendents swarming all over the place. The tractor accosting the first Central Excise officer on the road is likely to be seized for straying on to the road.
Board circular states that “Representations have been received in the Board that certain field formations are proposing to charge excise duty on agricultural tractors on the ground that besides agricultural work, these tractors are used for haulage of farm products, fertilizers, etc. thereby qualifying as “road tractors for semi-trailers” attracting Central Excise duty @ 16%.”
++ “Road tractors for semi-trailers” attract Central Excise duty at the rate of 16%, if the engine capacity is more than 1800 cc.
++ Tractors falling under Chapter heading 8701 were exempted from excise duty in Budget 2004-05 with the intention to give exemption to agricultural tractors, in order to encourage farm sector.
++ A tractor primarily designed and meant for agriculture purposes can also be incidentally used to take goods to the nearest market.
++ But that is an incidental use, and such tractors are not primarily designed to haul trailers.
++ Therefore, incidental use of hauling trailers will not put such tractors in dutiable category. Therefore primary use of tractor should be the deciding factor.
So the good Board has advised the field to be so informed.
CIRCULAR NO. , Dated: November 16, 2006