GST Judgments KERALA AAR Archives - Tax Heal

No GST on lease of water channel to be used for fish farming given Gram Panchayat : AAR

CA Satbir Singh — Mon, 30 Aug 2021 14:29:58 +0000

AUTHORITY FOR ADVANCE RULINGS, KERALA

Chellanam Grama Panchayath, In re

SIVAPRASAD S. AND SENIL A.K. RAJAN, MEMBER

ADVANCE RULING NO. KER/100/2021

MAY 25, 2021

PROCEEDINGS

1. The applicant is a Local Self Government Institution and is engaged among other activities in leasing of wet land 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.

2. At the outset, the provisions of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as CGST Act) and the Kerala State Goods and Services Tax Act, 2017 (hereinafter referred to as KSGST Act) are same except for certain provisions. Accordingly, a reference hereinafter to the provisions of the CGST Act, Rules and the notifications issued thereunder shall include a reference to the corresponding provisions of the KSGST Act, Rules and the notifications issued thereunder.

3. The applicant sought advance ruling on the following:

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.

4. Contentions of the Applicant:

4.1 The applicant states that as per Sl. No. 54 of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017; under Heading 9986 – services relating to rearing of all life forms of animals, by way of renting or leasing of vacant land with or without a structure incidental to its use are exempted from GST. As per the said entry, exemption is available for services relating to cultivation and rearing of all forms of animals. The services can be by way of; (i) agricultural operations; (ii) supply of farm labour; (iii) process carried out at an agricultural farm; (iv) renting or leasing of agro machinery or vacant land; (v) loading and unloading of agricultural produce; (vi) agricultural extension services and (vii) services by any agricultural produce marketing committee. Therefore, the conditions to be satisfied for exemption under the said entry is that the activity carried out should be cultivation or rearing of animals or agricultural produce and the services provided shall conform to any of the descriptions enumerated therein. The conditions to be satisfied for grant of exemption are; (a) activity carried should be cultivation or rearing; (b) Cultivation or rearing should be of agricultural produce or animals.

4.2 The activity carried out is fish and crab farming. The term “rearing” means bring up and care for until they are fully grown, or care for until they are fully grown. The next condition is that the rearing should be of “animals”. In this case, rearing is carried out in respect of fish and crab. The wet land is given on annual lease. This is clear from the allotment letter and agreement. The auction was carried out only to ascertain the tenant who quotes the highest rent. Merely for the reason that auction is done, does not take away the activity from renting. As per definition in para 2(zz) of Notification No. 12/2017 – Central Tax (Rate), dated 28-6-2017 “renting in relation to immovable property” means allowing, permitting or granting access, entry, occupation, use or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property and includes letting, licensing or other similar arrangements in respect of immovable property. From the above definition, it is clear that the arrangement between lessee and Chellanam Grama Panchayath clearly comes within the meaning of renting.

4.3 The last condition is that the renting should be of vacant land with or without structure incidental for its use. As per Black’s Law Dictionary; “Land” includes not only the soil or earth, but also things of a permanent nature affixed thereto or found therein, whether by nature as water, trees, grass, herbage, other natural or perennial products, growing crops or trees, mineral under the surface, or by hand of man, buildings, fixtures, fences, bridges as well as works constructed for use of water, such as dikes, canals etc. It is thus clear that canals also fall within the meaning of the term “land”. The word ‘chaal’ used in Malayalam is synonymous with canal and forms part of land mass (in this case of paruthithodu chaal) and land referred at Sl. No.54 of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 therefore includes canals. Thus, all the conditions stipulated in Sl. No. 54 of the Notification No. 12/2017 Central Tax (Rate), dated 28-6-2017 is satisfied and the lease of vacant land for fish farming qualifies for exemption as per the said entry.

5. Contentions of the Jurisdictional Officer:

5.1 The jurisdictional officer submitted that Sl. No.54 of Notification No. 12/2017 – Central Tax (Rate), dated 28-6-2017 says that “Services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce by way of— (a) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; (b) supply of farm labour; (c) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market; (d) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use; (e) loading, unloading, packing, storage or warehousing of agricultural produce; (f) agricultural extension services; (g) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce” are exempt from GST.

5.2 The words such as “rearing of all life forms of animals” clearly reveal the legislative intention to include fish also, since they are aquatic animals. In the circumstance the lease rent charged by Municipality/Panchayath for land i.e; water channel used for Fish farming falls within the meaning of “service relating to rearing of all life forms of animals – by way of renting or leasing of vacant land” is eligible for GST exemption as per Sl. No.54 of Notification No. 12/2017 – Central Tax (Rate), dated 28-6-2017 and corresponding notification under Kerala GST.

6. Personal Hearing:

The applicant was granted opportunity for personal hearing on 5-1-2021. The Panchayat Secretary represented the applicant. He reiterated the contentions made in the application and requested to issue ruling on the basis of the submissions made by them.

7. Discussion and Conclusion:

7.1 The matter was examined in detail. The issue to be decided is whether the activity is covered by the exemption contained in the entry at Sl. No. 54 of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017. The entry at Sl. No. 54 of the said notification read as follows:

“54. Heading – 9986 – Services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce by way of— (a) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; (b) supply of farm labour; (c) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market; (d) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use; (e) loading, unloading, packing, storage or warehousing of agricultural produce; (f) agricultural extension services; (g) services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce; (h) services by way of fumigation in a warehouse of agricultural produce. – Nil”.

7.2 On a plain reading of the above entry, 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. 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 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 28-6-2017 and hence the second condition is satisfied. The vacant wet land is given on rent for rearing of fish and crabs. Thereby the third condition that the rearing should be of animals is satisfied. Therefore, the activity of renting/leasing the water channel by the applicant for fish farming for a consideration determined through auction is squarely covered under the exemption at entry at Sl. No. 54 of Notification No. 12/2017 – Central Tax (Rate), dated 28-6-2017 as services relating to rearing of all life forms of animals by way of renting or leasing of vacant land.

In view of the observations stated above, the following rulings are issued:

RULING

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 28-6-2017 and corresponding notification under Kerala GST.

12% GST on turnkey project of civil structure provided to Central Govt. as it is Works Contract : AAR

CA Satbir Singh — Thu, 16 May 2019 12:30:30 +0000

The work of design, realisation, integration and commissioning of Trisonic Wind Tunnel as a turnkey project will fall under definition of works contract under section 2 (119). The service provided to the Central Government by way of construction, erection, commissioning, installation, completion, fitting out, of a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession will attract 12 per cent GST as per SI. No.3(vi) of Notification No.08/2017-Integrated Tax (Rate) dated 28-6-2017.

AUTHORITY FOR ADVANCE RULINGS, KERALA

Vikram Sarabhai Space Centre, In re

S. ANIL KUMAR AND B.S. THYAGARAJABABU, MEMBER

ADVANCE RULING NO. KER/43/2019

APRIL 12, 2019

Hari, CA for the Applicant.

Download Ruling Click here

Manufacturing services on physical inputs owned by principal is Job work : AAR

CA Satbir Singh — Thu, 16 May 2019 12:24:15 +0000

Manufacturing services on physical inputs owned by principal is treated as service by way of job work and is covered under Heading No. 9988 and, thus, activity of job work carried out on materials supplied by principal falling under HSN 5702 & 5703 are taxable at rate of 2.5 per cent CGST and 2.5 per cent SGST vide Entry No. 26(i)(b), Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017

AUTHORITY FOR ADVANCE RULINGS, KERALA

Irene Rubbers, In re

S. ANIL KUMAR AND B.S. THYAGARAJABABU, MEMBER

ADVANCE RULING NO. KER/45/2019

APRIL 12, 2019

Radhika Chandra Sekhar, Adv. for the Applicant.

Download Click here

Related Post GST Job Work : Free Study Material

No GST on Diagnostic services by clinical establishment being health care services : AAR

CA Satbir Singh — Thu, 16 May 2019 12:13:28 +0000

A clinical establishment engaged purely in diagnostic services such as clinical biochemistry, micro biology, chemotology, clinical pathology, radiology, ECG, radiometry, pulmonary function test etc. comes under purview of Clinical Establishment Act and are rendering services through qualified laboratory technicians, paramedical technicians, doctors and radiologist. As per SRO. No. 371/2017 vide SL. No. 74 (Notification No. 12/2017-Central Tax (Rate) dated 28-6-2017, services by way of diagnosis come under category of health care services covered under SAC 9993 in connection with health care services provided by a clinical establishment and are, therefore, exempt from GST

FOR ADVANCE RULINGS, KERALA

Medivision Scan & Diagnostic Research Centre (P.) Ltd., In re

S. ANIL KUMAR AND B.S. THYAGARAJABABU, MEMBER

ADVANCE RULING NO. KER/41/2019

APRIL 12, 2019

Shojan K. Antony for the Applicant.

Download Ruling Click here

Refer also GST Exemption : Free Study Material

No GST on Centage Charges / Consultancy Charges for Pure Services to State Govt : AAR

CA Satbir Singh — Thu, 16 May 2019 12:08:09 +0000

Applicant has been selected as Construction Agency / Project Management Consultant / Special Purpose vehicle for preparation of DPR, tendering of work, executing agreement with contractor, supervision of construction, recording measurements in M-Book, preparation of bill etc. for which they are eligible to a centage charge / consultancy charge calculated on estimated value / value of work done in respect of following projects;

1.	Construction of Model Residental School, Hostel for Boys and Girls, Kitchen Block and Staff Quarters at Aralam in Kannur District for SCSTDD.
2.	Construction of Building for Pre-Examination Training Centre in Kannur District for SCSTDD.
3.	Construction of Pre-Metric Hostel for Boys at Kadirur in Kannur District for SCSTDD.
4.	Construction of Model Residential School, Hostel, Kitchen Block and Staff Quarters at Peringome in Thaliparamba Taluk in Kannur District for SCSTDD,
5.	Construction of Sub-Registrar Office at Thiruvananthapuram for Registration Department.

• Applicant requested for Advance Ruling on GST rate applicable for Centage charges / Consultancy charges.

Held

Centage Charges / Consultancy Charges received by applicant in respect of works at SI. Nos. (1) to (4) above being in relation to pure services provided to State Government by way of activity in relation to function entrusted to a Panchayat/Municipality under 243G/243W of Constitution is exempt from goods and services tax as per SI No. 3 of Notification No. 12/2017 Central Tax (Rate) dated 28-6-2017. Outsourced activities of soil investigation and structural design works for DPR preparation received by applicant will also be entitled to exemption being pure services. However, services supplied/received by applicant in respect of project at Sl. No.5 above are taxable at rate of 18 per cent.

AUTHORITY FOR ADVANCE RULINGS, KERALA

Kerala State Construction Corporation Ltd., In re

S. ANIL KUMAR AND B.S. THYAGARAJABABU, MEMBER

ADVANCE RULING NO. KER/46/2019

APRIL 12, 2019

Download Ruling Click here

Refer GST Exemption : Free Study Material