Home Case Index All Cases GST GST + AAR GST - 2021 (8) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (8) TMI 892 - AAR - GSTLevy of GST - leasing of tank containers taken form a supplier - lessor located outside India and the tank containers do not reach India - Finance lease - HELD THAT:- The constitution has been amended to include Entry 12A in the Article 366 which enables levy of tax on supply of goods & services except on alcoholic liquor for human consumption. Further the definition of goods in the Section 2(d) of the CST Act is amended to include only petroleum and liquor and Section 2(g) has to be applied only to the goods enumerated in Section 2(d). Therefore sales tax under CST Act can be levied only on these goods whereas tax on supply of goods and services is levied under CGST/SGST and IGST Acts - Further under Accounting Standard-19 of Accounting Standards of India the Ieased Asset will be shown in the books of lessee and this does not alter the nature of a lease transaction. The law mandates that the transfer of title in goods happens under an agreement before the property in goods passes to the purchaser. Further the law mandates that such agreement shall have a clause which stipulates that goods wall necessarily pass at a future date to the purchaser - The law does not provide for an option to purchase the goods at the end of the lease period but makes it an obligation on the part of contracting parties to necessarily transfer such property on the completion of period of agreement. A plain reading of the relevant terms of the contract clearly indicate the consensus ad idem or the meeting of minds between the parties to the contract that the agreement is prima facie for lease. There is no fixed lease term but the contract only mentions minimum lease period which may extend beyond such minimum period - There is no binding obligation for purchase of the goods at the end of the lease term. The agreement does not confer any title upon the lessee but a mere option to purchase based on fulfilment of certain conditions. The terms of the agreement clearly indicate that the property in goods passes to the applicant only when he exercises the option failing which the property has to be returned back to the lessor at a specific deposed indicated by him. Therefore during the period of lease the transaction remains a service and the moment the option to purchase the goods is exercised by the applicant it becomes the transaction of sale. Hence the transaction made by the applicant does not fall under Entry 1 (c) of Schedule II to the CGST Act. Thus, the applicant is liable to pay IGST on importation of lease services into India.
|