Clarifying their stance, Finance Ministry states no change in GST law for farmers

New Delhi, May 29: Making tax payment easy through introducing the GST, the government has made things feasible for the people. There were certain media reports on the taxation system imposed on farmers. 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) for farmers.

The news making the rounds was related to the Goods and Service Tax law relating to farmers, which 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 a statement coming from the Ministry of Finance, it said, “Earlier, it has been reported in a certain section of the Press that certain changes are made in GST law relating to farmers, which will come into force w.e.f. 1st June 2018 according to which farmers would be required to take registration & pay GST @ 18% when lease-out their land.”

The ministry stated that the news was misleading and factually incorrect. There have been no changes in the GST law and taxation relating to farmers since July 2017, when GST was implemented.

Apart from this, the Ministry of Finance has also reported that support service to agriculture, animal husbandry, forestry, fishing have been exempted from GST.

Such services have been kept on the lease, renting 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 (sharecropping) or otherwise is also exempt from GST.

As to the agriculturist it has been taken into consideration that they are exempted from GST registration. Agriculturist has been defined to mean an individual or a HUF who undertakes cultivation of land either by own labor or by a labor of family or by servants or wages payable in cash or kind or by hired labor under personal supervision or personal supervision of any member of the family.

Therefore, clarifying their stand on the misleading reports, the Ministry of Finance has made things clear and stated the GST system incorporated for the farmers.