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2021 (2) TMI 994 - AAAR - GSTClassification of goods - renting of e-bikes(Miracle), bicycles(Move) without operator - to be classified under the SAC 9973 - Leasing or rental services without operator or otherwise - Sl.No.17 (viia) of Notification No.11/2017-Central Tax (Rate) dated 28th June 2017 as amended - HELD THAT:- In the instant case, there is no doubt that the first two attributes laid down by the Supreme Court are evident in this transaction in as much as the User Agreement is very clear that the goods available for rent are the e-bikes “Yule Miracle” and bicycles “Yule Move”. However, in order to determine whether the instant transaction involves the “transfer of the right to usegoods” it is imperative that the other three attributes are also evident. We have gone through the User Agreement furnished by the Appellant which is an agreement with the Rider for rental, waiver of liability and release. Transfer of right to use also involves transfer of possession and control of the goods to the user of the goods. The right to use the goods - in this case, the right to use the vehicles - can be said to have been transferred by the Appellant to the rider only if the possession of the said vehicles had been transferred to them - the Rider would have the right to use the vehicle only if he was in lawful possession of it. There has to be, in that case, an act demonstrating the intention to part with the possession of the vehicle. In this context, we have to analyze the terms of the agreement to ascertain whether effective control and possession has been transferred by the supplier Appellant to the recipient of the goods. The agreement provides the rider access to use the vehicles (e-bikes and bicycles). Once access is provided, the rider uses the vehicle. However, while using such vehicle, there is no transfer of any interest in the vehicle in favour of the rider. The vehicle continues to be in possession of the transferor. What is used by the rider is the service which is provided by the Appellant. The rider never gets the possession of the vehicle. Getting access to use the vehicle does not tantamount putting the rider in possession of the vehicle. Except having access to the facility which the Appellant is providing by virtue of possessing such goods, no such right in the goods is transferred to the rider. Providing access does not amount to right to use goods. We also see from the terms of the User Agreement that the vehicles (e-bikes and bicycles) are always in the physical control and possession of the Appellant at all times and there is no transfer of right to use such goods. What is permitted under the User Agreement is a permission to have access to the vehicles and use the same in designated regions / areas for the designated period of time. In other words, the Appellant retains the effective control of the goods in all respects - there are no transfer in the right to use the goods and we hold that in the absence of any such transfer of the right to use the goods, the Appellant does not get covered under entry Sl.No 17(iii) of the Rate Notification. The appropriate correct entry is SL.No 17(viia) i.e Leasing or renting of goods and the rate of tax will be the same rate of tax as applicable on supply of like goods involving transfer of title in goods.
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