AGRICULTURE UNDER GST – WHETHER TAXABLE
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 23-3-2017
The revised model GST law on GST (version-II) defines agriculture and agriculturist. The agriculture is out of scope of GST and agriculturist is not a taxable person.
Agriculture [Section 2(7)]
As per section 2(7) of the revised Model GST law, 'agriculture' means all its grammatical variations and cognate expressions, includes floriculture, horticulture, the raising of crops, grass or garden produce and also grazing, but does not include dairy farming, poultry farming, stock breeding, the mere cutting of wood or grass, gathering of fruit, raising of man-made forest or rearing of seedlings or plants.
Therefore, agriculture would include:
* all its grammatical variations
* all its cognate expressions,
* floriculture, (cultivation of ornamental flowers)
* horticulture, (cultivation of garden)
* sericulture, (rearing of silk worms)
* the
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the purpose of Section 2(i) of the Act. [T.N. Godavarman Thirumulkped v. Union of India, 1996 (12) TMI 390 – Supreme Court of India , para 4] [Forest Conservation Act (69 of 1980), S.2(i)].
The terms forest is to be understood in the dictionary sense and also that any area regarded as a forest in the Government records, irrespective of ownership would be forest. [M.C. Mehta v. Union of India (2004) 12 SCC 118, 181, para 82]
'Forest means such large areas where agricultural is not done and which is covered by trees and shrubs. Land having an average number of 200 trees per hectare ought to be treated as 'forest'. [ T.N. Godavarman Thirumulpad (98) v. Union of India, (2006) 5 SCC 28, 32, para 3]
The Indian Forest Act, 1927 covers all categories of forests and extends to whole of territories specified in First Schedule of the Constitution.
Agriculturist [Section 2(8)]
As per section 2(8) of the revised Model GST law, 'agriculturist' means a person who cultivate
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servants or by hired labour. Further, in the case of a Hindu Undivided Family, land shall be deemed to be cultivated personally, if it is cultivated by any member of such family.
This expression has been used in the definition of 'agriculturist' and a person will be considered as an 'agriculturist' only when a person cultivates land personally. To cultivate personally would imply carrying on agricultural operations on his own account by employing own labour, family's labour or hired labour under own supervision or of his family. In case of HUF, it could be done by any member of HUF.
The explanation clarifies that cultivation can be treated as being cultivated personally if it is done by servants or by hired labour in case of widow, minor, physically or mentally disabled persons or serving members of armed forces of Union.
Where persons who do not cultivate personally by employing a labour but do so by awarding contract of cultivation on sharing basis, which is ge
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