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Case Law Details

Case Name : In re Sri Vinayaka Hatcheries (GST AAR Andhra Pradesh)
Appeal Number : Advance Rulings No. AAR No. 08/AP/GST/2022
Date of Judgement/Order : 30/05/2022
Related Assessment Year :
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In re Sri Vinayaka Hatcheries (GST AAR Andhra Pradesh)

The applicant seek Advance Ruling on the applicability of GST on renting of Land and 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” and eligible for GST exemption as per SI.No.54 of notification No. 12/2017 central tax (Rate) dt: 28.06.2017 and corresponding notification under Andhra Pradesh GST.

Primarily, we discuss the contention of the applicant that fish and prawn farming is covered under ‘rearing of all life forms of animals’, which means ‘care for the younger ones until they are fully grown’.

If we clearly examine the entry under 9986, the thrust is on services relating to ‘cultivation of plants’ and ‘rearing of all life forms of animals’. Cultivation of plants is essentially ‘agriculture’ while ‘rearing of all life forms of animals’ is ‘animal husbandry’. Animal husbandry is the branch of agriculture where animals are reared, bred and raised for commercial purposes like meat, fibre, eggs, milk and other food products. Fish farming is not an agricultural activity as no basic agricultural operation ‘directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing’, as enumerated in sl.no. 54(a) is carried out on that vacant land. Furthermore, in case of fish/prawn farming, any of the processes as listed in the sl.no.54 (c) of the notification such as ‘tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such other operations which do not alter the essential characteristics of agricultural produce’ are not carried out on the vacant land. Hence, fish/prawn farming is not covered under services to agriculture as enumerated under SI.No.54 of the notification.

Secondarily, we examine the fact that whether the land leased by the applicant is covered under services relating to cultivation of plants and rearing of all life forms of animals by way of ‘renting or leasing of agro machinery or vacant land with or without a structure incidental to its use. In the instant case the applicant has taken on lease a land through a lease agreement. The clause 10 of the lease agreement is reproduced below for reference.

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July 2024