2018 (11) TMI 280 – AUTHORITY FOR ADVANCE RULINGS, KERALA – 2018 (18) G. S. T. L. 836 (A. A. R. – GST) – Classification – rate of GST – quit rent or lease rent paid to Government through Forest Department – Whether quit rent / lease rent paid to Kerala Government on the land used for agricultural purpose (Coffee Plantation) be classified under HSN 9986 or HSN 9973?
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Held that:- In the instant case vacant land was given by erstwhile Cochin State to the applicant for cultivation on lease rent. Accordingly the petitioner converted the vacant land to Coffee Plantation. Therefore the lease rent collected by Government through Forest Department is exempted from GST vide Heading 9986 of Notification No.12/2017- Central Tax (Rate) / SRO.No.37
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rest Department. Forest Department is demanding 18% GST. It is alleged that as per HSN 9973 the lease rent paid by the applicant in connection with transfer of right in goods without the transfer of title. According to the applicant, as per Section 2(52) of GST Laws goods means every kind of movable property. Hence the land being an immovable property cannot be classified as goods and HSN 9973 will not applicable for rent on land leased for agriculture. As per HSN 9986 renting or leasing of vacant land for use relating to cultivation of plants or agricultural produce is exempted from tax. In the circumstances the applicant requested advance ruling on the following: Whether quit rent / lease rent paid to Kerala Government on the land used fo
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y for a consideration and thereby the lease transactions covered under the category of Supply of Services . Quit-rent is a tax or land tax imposed by Government on occupants of freehold or leased land in lieu of services to a higher landowning authority. As per Notification No. 12/2017- Central Tax (Rate) / SRO.No.371/2017 Government has exempted intra-state supply of services covered under Heading 9986. As per this notification services relating to cultivation of plants or agricultural produce by way of vacant land with or Without a structure incidental to its use is exempted from tax liability. In the instant case vacant land was given by erstwhile Cochin State to the applicant for cultivation on lease rent. Accordingly the petitioner con
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