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

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

• Cochin Plantations Ltd., In re [2018] 99 taxmann.com 55/70 GST 806/18 GSTL 836 (AAR – KERALA) (para 4.2).