GST exemption for leasing water channels used for fish farming applies where the lease supports rearing of animals.

Lease rent for a water channel used for fish and crab farming was treated as exempt from GST because the transaction was characterised as renting or leasing of immovable property within the exemption for services relating to rearing of all life forms of animals by way of renting or leasing of vacant land. The ruling treated fish and crabs as animals, held that keeping them until full growth amounts to rearing, and accepted that the term "renting" in the notification covers leasing. The auction process was viewed only as a method for fixing rent and did not alter the legal character of the lease.

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Issues: Whether lease rent for a water channel used for fish farming is covered by the exemption for services relating to rearing of all life forms of animals by way of renting or leasing of vacant land under Sl. No. 54 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

Analysis: The arrangement was treated as renting of immovable property, since the water channel was leased to the applicant for fish and crab farming. Fish and crabs were held to be animals, and the activity of keeping them until full growth amounted to rearing. The auction merely determined the rent and did not change the legal character of the transaction as a lease. The expression "renting" in the notification was understood to include leasing, and the water channel was treated as vacant land within the scope of the exemption entry.

Conclusion: The lease rent paid for the water channel used for fish farming is exempt from GST under Sl. No. 54 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

Ratio Decidendi: Renting or leasing of land used for rearing fish and other animals falls within the exemption for services relating to rearing of all life forms of animals by way of renting or leasing of vacant land.

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