2021 (7) TMI 480 - AAR - GST

Exemption from GST - lease rent charged by Municipality / Panchayath for land i.e., water channel used for fish farming - falls within the meaning of services relating to rearing of all life forms of animals- by way of renting or leasing of vacant land or not - Sl.No.54 of N/N. 12/2017 - Central Tax (Rate) dated 28-06-2017 and corresponding notification under Kerala GST - HELD THAT - On a plain reading of entry at SI No. 54 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017, it is evident that the services relating to cultivation of plants and rearing of all life forms of animals by way of renting or leasing of vacant land with or without structures is exempted under the entry. Application allowed.

Summary

Issues:
Whether lease rent charged by a Local Self Government Institution for land used for fish farming qualifies for GST exemption under Notification No. 12/2017 - Central Tax (Rate).

Analysis:
The applicant, a Local Self Government Institution, sought an advance ruling on whether the lease rent charged for land used for fish farming falls under the exemption provided for services relating to rearing of animals by renting or leasing of vacant land, as per Notification No. 12/2017 - Central Tax (Rate). The contention was based on the interpretation of the conditions for exemption under the said entry, specifically focusing on the activities of cultivation or rearing of animals, and the nature of the land provided for such activities.

The applicant argued that fish and crab farming constituted rearing of animals and that the wet land leased for this purpose met the definition of vacant land as per the exemption criteria. They emphasized that the activity of renting the water channel for fish farming was within the scope of renting immovable property, satisfying the conditions for exemption under the notification.

The jurisdictional officer supported the applicant's stance, highlighting that the legislative intention behind the exemption was to include all life forms of animals, which encompassed fish as aquatic animals. Therefore, the lease rent charged for land used for fish farming should be eligible for GST exemption under the relevant notification.

After a detailed examination of the provisions and contentions presented, the Authority for Advance Ruling concluded that the lease rent charged by the Local Self Government Institution for the water channel used for fish farming fell within the meaning of services relating to rearing of animals by way of renting or leasing of vacant land, making it eligible for GST exemption as per Notification No. 12/2017 - Central Tax (Rate). The ruling affirmed that the activity of leasing the land for fish farming met all the necessary conditions outlined in the exemption entry, thereby justifying the exemption from GST.

This comprehensive analysis of the judgment provides a detailed insight into the interpretation and application of the relevant provisions concerning the GST exemption for lease rent charged by Local Self Government Institutions for land used in specific agricultural activities, ensuring clarity on the tax implications in such scenarios.