Input tax credits can be claimed on a leased freight vehicle: AAR [Read Order]
The West Bengal Advance Rulings Authority (AAR) has ruled that input tax credits can be claimed in accordance with the Law on the Cargo Vehicle Leased.
The applicant intends to rent unmanned trucks or tankers to freight forwarding agencies or any other person. The applicant seeks a ruling as to whether the provision of services through the rental of a freight vehicle without operators to the GTA would be exempt and also wishes to know, if not exempt, what will be the classification and rate of appropriate tax in the GST Act, 2017. Further, the Applicant seeks clarification as to whether the input tax credit paid on the purchase of motor vehicles qualifies or not.
The decision was made by the Authority composed of Susmita Bhattacharya, Joint Commissioner, and Mr. Parthasarathi Dey, Senior Joint Commissioner on a request filed by lshan Resins & Paints Limited.
Relying on the judgment Commissioner of Customs and Central Excise against Sachin Malhotra, he considered that when hiring a taxi system, as defined in Article 75 of the Law on Vehicles 1988 motor vehicle, possession and control of the vehicle is transferred to the lessee. Therefore, unless such a transfer of the right of use occurs, a contract for the rental of a vehicle is not considered to be a taxi hire under the taxi hire scheme.
The Authority observed that the applicant intended to hire vehicles such as trucks, tankers, etc., intended for the transport of goods. Control and possession of the vehicle will be transferred to the lessee, who will engage the operator and bear the costs of repairs, insurance, etc. It is therefore not classified under SAC 9966, which is limited to rental services of transport vehicles. with an operator.
While allowing the request, the AAR further clarified that the service of the applicant for the rental of goods transport vehicles is classified under SAC 997311 and taxable under Sl n ° 17 (iii) of the notification n ° 1112017 – CT ( rate) from 2810612017.