Goods and Services Tax – GST – By: – CA Akash Phophalia – Dated:- 11-8-2016 Last Replied Date:- 12-8-2016 – Editorial Note The concept of indirect taxation is in the process of revolutionary change. Concept of manufacturing, sale and provision of service are going to be merged in the new concept of supply. This article aims at enlightening readers about the current provision of Model GST law in relation to agriculturist. Introduction India is the land of villages. The saying is clear about the core activities of majority residents of our country. Agriculture is the key activity and needs to be kept out of the purview of taxation law. Currently, it is out of the purview of excise and core agriculturally and related activities are kept out of service tax law also. Further, VAT law has also kept agricultural products out of taxation regime. This intent of law is seemed to be carried as legacy under the upcoming new GST regime also. Meaning of Agriculture Clause 2(7) of Model GST Act prov
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g of this term is explained hereunder. Meaning of to cultivate personally It means to carry on any agricultural operation on one s own account – (a) by one s own labour, or (b) by the labour of one s family, or (c) by servants on wages payable in cash or kind (but not in crop share) or by hired labour under one s personal supervision or the personal supervision of any member of one s family. As per explanations given in the said clause, a widow or minor or a person who is subject to any physical or mental disability or is a serving member of the armed forces of the Union, shall be deemed to cultivate land personally if it is cultivated by her or his servants or by hired labour. In case of Hindu undivided family, land shall be deemed to be cultivated personally, if it is cultivated by any member of such family. Who can be an agriculturist? Form the plain reading of the meaning of agriculturist it gives an impression that any person whether it may be an individual, or firm or HUF or asso
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nderstood in the common parlance. Although agricultural operations are normally carried on the land which is called as an agricultural land in common parlance. But it is not statutorily required that the land has to be an agricultural land. Further, it is noticeable point that agricultural operations could be carried out at any place and not essentially on ground land. Benefit to agriculturist Tax under GST law is payable by the taxable person and it is the taxable person who needs to comply with all the formalities under GST law. Taxable person is defined under clause 9 of the Model GST law. The said clause provides that an agriculturist shall not be considered as a taxable person. It implies that once a person is an agriculturist then it is not required to comply with any of the compliances under this law being not a taxable person. Boon to agriculturist From the reading of the existing Model GST law it conveys that once a person is an agriculturist it is out of the definition of the
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