No GST on leasing of land by farmers: Government

New Delhi, May 28 (IANS) The government on Monday dismissed rumours that farmers would now have to pay 18 per cent GST when they lease out their land from June 1, calling such reports "factually incorrect" and "misleading".

The clarification came a day after Prime Minister Narendra Modi accused the Congress of spreading lies among farmers that if they give their land on contract farming, the government will charge them 18 per cent GST. 

The Prime Minister urged the farmers not to believe in "their lies and instead complain against those who are spreading them". "They will face the full force of the law," he had said at a public rally in Baghpat (Uttar Pradesh).

The Finance Ministry said there had been no change in the Goods and Services Tax (GST) law and taxation relating to farmers since July last year.

"It has been reported in certain section of the press that certain changes have been made in GST law relating to farmers, which will come into force with effect from June 1, according to which farmers would be required to take registration and pay GST of 18 per cent when they lease out their land. 

"This news is factually incorrect and misleading. There has been no change in the GST law and taxation relating to farmers since July 2017, when GST was implemented," an official statement said.

It added that support services to agriculture, forestry, fishing or animal husbandry were exempt from the GST. 

"Thus, renting or leasing of land by farmers for agriculture, forestry, fishing or animal husbandry on batai (share cropping) or otherwise is also exempt from GST," the Ministry said adding that agriculturists were also exempt from taking GST registration.