RENTING OR LEASING OF
LAND BY FARMERS IS EXEMPT FROM GST
The Goods and Services Tax Act, 2017 came into force with effect from 1.7.2017 in India.
The Central Government has now
clarified that the renting or leasing of land by farmers for agriculture,
forestry, fishing or animal husbandry on batai (share cropping) or otherwise is
exempt from Goods and Services Tax.
Similarly agriculturists are
exempted from taking GST registration and agriculturist has been defined to
mean an individual or an HUF who undertakes cultivation of land.
The Press Release issued by the Central Government is given below for ready
reference:
PRESS RELEASE DATED 28.5.2018
It has been reported in certain section of the Press that certain changes have been made in
GST law relating to farmers, which will come into force with effect from 1st June, 2018 according to which farmers would be required to take registration and pay GST of 18% when they lease out
their
land.
2. This news is factually incorrect
and misleading. There has
been
no change in
the
GST law and taxation relating to
farmers since July, 2017, when GST was implemented. Support services to agriculture, forestry, fishing
or animal husbandry are exempt from GST.
Such exempted support
services include renting or leasing of vacant land with or without
a structure incidental to its use. Thus, renting or leasing of land by farmers for agriculture, forestry, fishing or animal husbandry on
batai
(share cropping)
or otherwise is
exempt from
GST.
3. Further, agriculturists are exempted from taking GST registration.
Agriculturist has been
defined to mean
an
individual or an HUF
who undertakes cultivation
of land-
a) by own
labour
b) by the labour of family
c) by servants or wages payable in cash or kind or by hired labour under personal
supervision or the personal
supervision of any member of
the family.