As per the GST Act, only a farmer, to the extent of supply of agricultural products cultivated from land is free from the requirement of GST registration. In detail, as per GST Act an agriculturist as an individual or as a Hindu Undivided Family who takes on agriculture or cultivation of land:

• By own labour, or
• By the labour of family, or
• By servants on wages payable in cash or by hired labour or kind under personal supervision or the personal supervision of any member of the family.

Only an agriculturist, to the extent of supply of produce out of cultivation of land is exempt from GST registration requirement.

Hence, only small agriculturist would be exempt from GST compliance. Any person who operates

• a company or
• LLP or
• any other type of entity

For the purpose of undertaking agriculture would be required to obtain GST registration if the aggregate turnover exceeds the exemption limit or other GST registration criteria is satisfied and they supply goods that attract GST.

IMPACT OF GST ON AGRICULTURE SECTOR IN INDIA IS ANALYZED AS UNDER

a) Poultry farming, dairy farming, and stock breeding are specifically kept out of the Agriculture sector and therefore the products from these are taxable under the GST regime.

b) Gathering of fruit, cutting of wood or grass and rearing of seedlings or plants or raising of man-made forest have also been specifically kept out of the Agriculture sector and therefore they all come under the taxable category as per GST regime.

c) Agriculture by persons other than Individual and HUF seems also kept out of the definition of “to cultivate personally”, therefore it seems that these will be taxable under GST regime.