Quit Rent for Rubber Plantation Classified under SAC 998619—Not Taxable | AAR

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  • Last Updated on 5 November, 2025

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Quit Rent for Rubber Plantation

Case Details: The Vaniampara Rubber Company Ltd., In re - [2025] 179 taxmann.com 99 (AAR-KERALA)

Judiciary and Counsel Details

  • Jomy Jacob IRS & Mansur M.I., Member
  • Sabu C.J., Adv. for the Applicant.

Facts of the Case

The applicant is engaged in rubber cultivation and holds 356 hectares of land on perpetual lease from the Kerala Government and paid quit rent to the Forest Department, which was used exclusively for agricultural purposes. During the proceedings, the Department contended that GST at 18% was applicable, classifying the payment as a service not related to agriculture. It was submitted that the quit rent was for leasing land used for agricultural purposes. The matter was accordingly placed before the Authority for Advance Ruling (AAR).

AAR Held

The AAR held that the quit rent paid by the applicant constituted consideration for leasing government land used for rubber cultivation and fell within SAC 998619. The SAC 997212 was inapplicable as the land was used for agricultural purposes, and the classification as ‘Other support services related to agriculture, hunting, forestry, and fishing’ was upheld. The ruling was in favour of the applicant under Section 9 of the CGST Act, 2017, and the Kerala GST Act, 2017. The AAR clarified that payments for leasing government land for agricultural cultivation are not liable to GST under the classification contended by the Department.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied