The Kerala Authority of Advance Ruling (AAR) ruled that no GST is payable on Renting/Leasing of vacant land used for fish farming.
The applicant, Chellanam Grama Panchayath is a Local Self Government Institution and is engaged among other activities in leasing of wetland for fish farming. The applicant has allotted some wet land, i.e., water channel (paruthithodu chaal in Chellanam) on lease. The land is used for fish and crab farming. The person who has taken the wet land on auction has to pay the agreed auction amount.
The applicant sought advance ruling on whether 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” eligible for GST exemption as per Sl.No.54 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017 and corresponding notification under Kerala GST.
The coram of Joint Commissioner of Central Tax, Shiva Prasad and Additional Commissioner of State Tax, Senil A.K.Rajan ruled that 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’ eligible for GST exemption as per SI.No.54 of Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017 and corresponding notification under Kerala GST.
“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. The conditions to be satisfied are; (1) vacant land with or without structures is provided; (2) the land should be provided on lease or rent; and (3) the activity for which the land is provided should be cultivation of plants or rearing of animals. In the instant case the applicant is providing a water channel (paruthithodu chaal in Chellanam) and there is no doubt that the water channel comes under the category of land. Thus the first condition is satisfied. The nature of provision of the land as evidenced by the allotment letter and agreement comes within the scope of definition of renting of immovable property in Para 2 (zz) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and hence the second condition is satisfied,” the AAR said.
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