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TMI Blog2021 (12) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... the GST Vide GSTIN 33AADCN6937H1ZD. They have sought Advance Ruling on the following question:- 1. Whether the GST paid on the Motor cars of seating capacity not exceeding 13 (including Driver) leased or rented to customers will be available to it as INPUT TAX CREDIR (ITC) in terms of Section 17(5) (a)(A) of Central Goods and Service Tax Act, 2017? 2. Whether the GST paid on the Motor cars of seating capacity not exceeding 13 (including Driver) registered as public vehicle with RTO to transport passengers, provided to their different customers on lease or rental or hire will be available to it as INPUT TAX CREDIT (ITC) in terms of Section 17(5)(a)(B) of Central Goods and Service Tax Act, 2017. 3. Whether the supply of services by way of Renting or Leasing or Hiring Motor Vehicles to SEZ to transport the employees of the customers without payment of IGST under LUT is deemed as taxable supply and whether ITC is admissible on Motor Vehicles procured and used commonly for such supply to SEZ and other than SEZ supplies? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs. 5,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by a person in the course or furtherance of business. Therefore, leasing of the Motor Vehicles to organization is a 'supply; and it is also a 'taxable supply' u/S 2(108) of CGST Act, 2017. Therefore, the law allows ITC where the Vehicle is rented or leased or hired.; Section 17(5)(a)(B) is not distinguishing between Motor Vehicles given on rental or hiring or leasing or in any other manner. It allows ITC where the Motor vehicle is used to transport passengers. The Applicant's Motor Cars are registered with Regional Transport Office [RTO] as Public vehicle to carry passengers. The employees of an organization transported in the Motor vehicle are also 'passengers'.; Further, Providing Motor vehicles to transport the employees of the organization is also transportation of passengers during the journey. The above provision intends to allow ITC on Motor Vehicles who necessarily need motor vehicle to provide service. The supply of services by way of Renting or Leasing or Hiring Motor Vehicles to SEZ to transport the employees of the customers without payment of IGST under LUT is deemed as taxable supply and hence ITC is admissible on Motor Vehicles procured a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be purely determined on the basis of words used in the ITC provisions. In this connection, they have relied on the decisions of Hon'ble Supreme Court of India in Keshavji Ravji & Co. v/s. CIT - [(1990) 183 ITR 1 (SC); Pandian Chemicals Ltd. v/s. CIT - [(2003) 262 ITR 278 (SC); Krishi Utpadan Mandi Samiti v. UOI (2004) 267 ITR; Coal Mines Officers' Association of India v. UOI (2004) 266 ITR 429 (Cal.); Vidarbha Irrigation Dev. Corpn. v/s ACIT [(2005) 278 ITR 521 (Bom); CIT v/s. Vadilal Lallubhai [(1972) 86 ITR 2 (SC)]; ICAI vs. Price Waterhouse, (1997) 90 Comp. Case 113, 140, 141 (SC); State of West Bengal vs. Scene Seven P. Ltd. AIR 2000 SC 3089, 3094; Harbajan Singh vs. Press Council of India (2002) 3 SCC 722, 727; District Registrar and Collector v. Canara Bank, (2005) 1 SCC 496.; H.H. Lakshmi Bai v/s. CIT - [(1994) 206 ITR 688, 691 (SC)]; Hansraj & Sons vs. State of J & K (2002) 6 SCC 227, 237-39. They have further stated that in any particular provision where the statutory language is plain or straight and its meaning is apparently clear, there is no scope of adding or deleting any words. By applying the maxim 'expressum facit cessare facitum', when there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia private Limited having zero rate of GST against LUT. 3. Photocopy of Staff Transport services agreement entered between New Pandian Travels Private Limited and Amazon Development center India Private Limited operating in DTA. 4. Sample invoice copies(Two Nos.) raised in the name of Amazon Development Centre India Private Limited charging 5% GST under Notification No. 11/2017-CT (Rate) dated 28.06.2017 3.3 On perusal of the above documents, it was found that the document pertaining only to staff transportation services has been furnished therefore a notice dated 02.11.2021 was issued calling for the documents in respect of leasing activity being undertaken by them. The applicant vide their letter dated 03.11.2021 received on 10.11.2021 stated as follows:- * In the agreement with the corporate client viz., M/s. Amazon Development India Pvt Ltd., as per Schedule-1 with heading "Scope of Work - Fixed Monthly Packaged Model", the Scope of work is that the Vendor/Contractor/Lessor shall provide minimum fleet of 150 vehicles which are reliable, safe, well-maintained, efficient, Air Condition and prompt transportation services to transport Amazon Associates from their home or No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicant is not eligible to avail ITC under Section 17(5)(a)(B) of CGST Act, 2017 as the applicant is not directly engaged in the transportation of passengers. Moreover since the applicant pays 5% GST in forward charge basis for the supply of renting motor vehicles, as per Sr. No. 10 of Notification 11/2017 -CTR dated 28th June. 2017, there is restriction that credit of input tax charged on goods and services used in supplying the service should not been taken. On the above observations, it could be stated that the applicant is ineligible to avail ITC on motor vehicles as per section 17(5) (a) (B) of CGST Act 2017. * According to Section 7(5) (b) read in conjunction with section 5(1) of IGST Act 2017, supply of goods or services or both to a SEZ developer or a SEZ unit shall be treated as a supply in the course of interstate trade or commerce and leviable to tax under IGST Act. Also in accordance with Section 16(1) of IGST Act 2017, supply of goods or services to SEZ developer or SEZ unit is classified as "Zero rated supply". In addition, section 16(3)(a) of IGST Act 2017 enables a registered person to make zero rated supply under LUT without payment of IGST. Hence from the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermination of whether the supply made under LUT is a 'taxable supply'. As the above are within the ambit of this authority, the application is admitted for pronouncement of Ruling. 7.1 From the submissions, it is seen that the applicant has stated that they are engaged in transporting passengers as a Rent-a-cab operator by providing the Motor vehicle on hire or rental basis either directly to passengers or to the organizations. They have classified the supply under SAC 9966 and have opted for payment of GST @5% by SI.No. 8 (vi) of Notification No. 11/2017-CT (Rate) dated 28th June 2017 and are not availing ITC on goods/services. The applicant has contended that providing Motor Vehicles on Lease or Hire or rental basis is a 'supply' within the scope of 'Supply' u/s 7(1) (a) of CGST Act 2017 and therefore leasing of the Motor Vehicles to Organization is a 'Supply' which stands excepted from the restriction to avail credit specified under Section 17(5)(a)(A) of the Act. They have further contended that Section 17(5)(a)(B) is not distinguishing between Motor Vehicles given on rental or hiring or leasing or in any other manner; it allows ITC where the Mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule-I and Schedule-II, the applicant is to extend vehicles of agreed standards with their drivers who are to be of the desired standards-etiquettes, Experience, etc agreed upon. The route will be given by Amazon and the applicant has to ensure adherence. * The applicant has entered into 'Staff Transportation Services Agreement' with M/s. Fidelity Business Services India Private Limited dated 18th May 2017. From the various clauses of the agreement and the Exhibits of the Agreement, the following are observed:- * The applicant is to provide the vehicles of varying capacities , viz., 4+1 Seater; 8+1 Seater and 12+1 Seater with and without A/C for Normal Operation on Trip Basis. * The charges are paid on Rate/Trip basis. The trip is defined in the agreement. * The vehicles are to be provided with the agreed standards with the drivers of set standards agreed upon. The applicant has furnished copies of Invoice No. NPTPLOO160202122 dated 01.07.2021; NPTPL00296202122 dated 01.09.2021 raised on Fidelity Business Services India Private Limited, wherein it is seen that the billing is based on the vehicle details and trips/trip rate and the SAC mentioned is 9966. They ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the relevant statutory Provisions of Section 17 (5) (a) of the CGST/TNGST Act 2017 is examined. Section 17(5)(a) of CGST Act 2017 reads as follows:- "(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub- section (1) of section 18, input tax credit shall not be available in respect of the following, namely:- (a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely:- (A) further supply of such motor vehicles; or (B) transportation of passengers; or (C) imparting training on driving such motor vehicles;" From the above, it is seen that Input Tax Credit is not available in respect of motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver) [hereinafter referred to as 'vehicles'] as per S. 17(5)(a) with the exceptions. The applicant has sought the applicability of the exception at (A) and (B) to their supply and thereby their eligibility to ITC of the Motor Vehicles bought by them and used for the supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rental/hire basis vehicles of particular standards with the drivers to their vendors. The vendors of the applicant uses the services received from the applicant and undertakes the transport related activities through the in-house transport team which decides the route, nodal points for transport, staff to be plied, modalities for such trips (escort requirement) etc. Therefore, it is evident that the supply made by the applicant is rental/hire of such vehicles and the activity of transportation of employee/associates is undertaken by the Vendor. Thus, in as much as the activity undertaken by the applicant is only renting/hiring of the Motor Vehicles with the operators and not undertaking transportation of passengers, the exception at S. 17(5)(a)(B) is not available to the applicant. 8.4 The third question raised before us, requires clarification as to Whether the supply of services by way of Renting or Leasing or Hiring Motor Vehicles to SEZ to transport the employees of the customers without payment of IGST under LUT is deemed as taxable supply and whether ITC is admissible on Motor Vehicles procured and used commonly for such supply to SEZ and other than SEZ supplies. According ..... X X X X Extracts X X X X X X X X Extracts X X X X
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