Renting Land For Fish/Prawn Farming Attracts 18% GST : AAR

The applicant had executed an agreement with Grobest Feeds Corporation (India) Private Limited for the purpose of taking a vacant land with a water channel meant for fish/prawn farming. The applicant approached the Authority seeking an advance ruling on the applicability of GST on the renting of land.

The applicant has sought an advance ruling on the applicability of GST on the rental of land. The advance ruling was sought on the issue of whether the activity of fish/prawn farming is covered under "services relating to rearing all life forms of animals by way of renting or leasing of vacant land." Whether the applicant is eligible for GST exemption as per SI.No.54 of notification No. 12/2017 central tax (Rate) dated 28.06.2017 and corresponding notification under Andhra Pradesh GST.

The applicant submitted that as per SI.No.54 of Notification dated 28.06.2017, under Heading 9986 – Services relating to the rearing of all life forms of animals, by way of renting of vacant land with or without a structure incidental to its use, are exempted from GST. As per the entry, exemption is available for services relating to the cultivation and rearing of all forms of animals.

The applicant submitted that the activity carried out is fish and prawn farming. The term "rearing" means bringing up and caring for someone until they are fully grown. In this case, rearing is carried out in respect of fish and prawns. The wetland is given on an annual lease.

The applicant contended that the words such as "rearing of all life forms of animals" clearly reveal the legislative intention to include fish and prawn also since they are aquatic animals. Hence, the lease rent charged by the lessee, i.e., water channel used for fish/prawn farming, falls within the meaning of "services relating to the rearing of all life forms of animals by way of renting or leasing of vacant land." It is eligible for GST exemption as per SI.No 54 of notification No. 12/2017 – Central Tax (Rate) dated 28-06-2017 and corresponding under the Andhra Pradesh GST Act.

The AAR observed that the absence of explicit intention in the lease agreement for the purpose for which the land is used would negate the eligibility criteria for exemption. Thus, it is essentially the condition of s.no. 54(d) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 that does not intend to consider the renting of vacant land as services relating to the rearing of all life forms of animals.

Applicant's Name: Sri Vinayaka Hatcheries

Citation: Advance Rulings No. 08/AP/GST/2022

Dated: 30/05/2022

Click Here To Read/Download Order