TAXES PAYABLE

3 Months Ended

Sep. 30, 2011

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 12 - TAXES PAYABLE

Enterprise Income Tax

Effective January 1, 2008, the new Enterprise Income Tax (“EIT”) law of the PRC replaced the existing tax laws for Domestic Enterprises (“DES”) and Foreign Invested Enterprises (“FIEs”). The new EIT rate of 25% replaced the 33% rate that was applicable to both DES and FIEs. The two year tax exemption and three year 50% tax reduction tax holiday for production-oriented FIEs was eliminated. Since January 1, 2008, Jinong became subject to income tax in China at a rate of 15% as a high-tech company, as a result of the expiration of its tax exemption on December 31, 2007, and accordingly, it made provision for income taxes for the three months ended September 30, 2011 and 2010 of $2,463,511 and $1,713,743, respectively. Gufeng is subject to 25% EIT rate and thus it made provision for income taxes of $622,653 for the three months ended September 30, 2011. The 25% EIT rate that Gufeng is subject to remains unchanged from the three months ended September 30, 2010. Jintai and Yuxing have been exempt from paying income tax since its formation as it produces products which fall into the tax exemption list set out in the EIT. This exemption is expected to last as long as the applicable provisions of the EIT do not change.

Value-Added Tax

All of the Company’s fertilizer products that are produced and sold in the PRC were subject to a Chinese Value-Added Tax (VAT) of 13% of the gross sales price. On April 29, 2008, the PRC State of Administration of Taxation (SAT) released Notice #56, “ Exemption of VAT for Organic Fertilizer Products ”, which allows certain fertilizer products to be exempt from VAT beginning June 1, 2008. The Company submitted the application for exemption in May 2009, which was granted effective September 1, 2009, continuing through December 31, 2015. The VAT exemption applies to all agricultural products sold by Jingtai and Yuxing, and all but a nominal amount of agricultural products sold by Jinong.

Income Taxes and Related Payables

Taxes payable consisted of the following:

	September 30, 2011		June 30, 2011
VAT provision (credit)	$	49,576	$	40,495
Income tax payable		9,123,760		6,593,876
Other levies		369,178		370,494
Total	$	9,542,514	$	7,004,865

Income Taxes in the Consolidated Statements of Income and Comprehensive Income

Income taxes consisted of the following:

	September 30, 2011		June 30, 2010
Current Tax	$	2,463,511	$	1,713,743
Deferred Tax		-		-
Total	$	2,463,511	$	1,713,743

Tax Rate Reconciliation

Substantially all of the Company’s income before income taxes and related tax expense are from PRC sources. Actual income tax benefit reported in the consolidated statements of income and comprehensive income differ from the amounts computed by applying the US statutory income tax rate of 34% to income before income taxes for the three months ended September 30, 2011 and 2010 for the following reasons:

September 30, 2011	China					United States
	15% - 25%					34%					Total
Pretax income (loss)	$	14,681,072				$	(1,485,925	)			$	13,195,147
Expected income tax expense (benefit)		3,670,268		25.0	%		(505,215	)	34.0	%		3,165,054
High-tech income benefits on Jinong		(766,515	)	(5.2	) %		-		-			(766,515	)
Losses from subsidiaries in which no benefit is recognized		(440,242	)	(3.0	) %		-		-			(440,242	)
Change in valuation allowance on deferred tax asset from US tax benefit		-					505,215		(34.0	) %		505,215
Actual tax expense	$	2,463,511		16.8	%	$	-		-	%	$	2,463,511		18.7	%
September 30, 2010	China					United States
	15% - 25%					34%					Total
Pretax income (loss)	$	10,702,296				$	(1,200,768	)			$	9,501,528
Expected income tax expense (benefit)		2,636,058		9.5	%		(408,261	)	34.0	%		2,227,797
High-tech income benefits on Jinong		(858,273	)	(3.1	) %							(858,273	)
Income tax benefit of nontaxable income on Jintai		(109,368	)	(0.4	) %		-		-			(109,368	)
Income tax benefit of nontaxable income on Yuxing		45,326		0.2	%		-		-			45,326
Change in valuation allowance on deferred tax asset from US tax benefit		-					408,261		(34.0	) %		408,261
Actual tax expense	$	1,713,743		6.2	%	$	-		-	%		1,713,743		18.0	%