No change in GST law relating to farmers, says FinMin

The Ministry of Finance on Monday rubbished various media reports, which indicated that there has been a change in laws and taxation relating to Goods and Services Tax (GST). Therefore, the ministry clarified by saying, “This news is factually incorrect and misleading.” The ministry remained firm that there has been no change in law of GST in regards to agriculture sector and it will continue to remain same which was inked during implementation since July 2017. 

It was reported earlier that certain changes have been made in GST law relating to farmers that 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.  

In this regards, the ministry said, “ 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.” 

As per the ministry, 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 also exempt from GST.

Further, agriculturists are also exempted from taking GST registration.  Agriculturist has been defined to mean an individual or an HUF who undertakes cultivation of land- by own labour, by the labour of family and  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.