9911796707
TMI Blog2021 (12) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... thereon? 3. Whether Applicant shall be eligible to avail the input tax credit of tax paid on the procurement of input supplies used in supplying services to NMMT under the Agreement? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT 2.1 MH Ecolife E-Mobility Pvt. Ltd., the Applicant with principle place of business at Sector 20, c/o NMMT City Bus Depot, Turbhe, Navi Mumbai, Maharashtra, 400705, is registered under GST. 2.2 Applicant and Navi Mumbai Transport Undertaking ("NMMT") have entered into an Operator Agreement dated 25.02.2020 vide which, Applicant shall be responsible to procure and supply air-conditioned electric buses to NMMT on gross contract basis to be plied on the routes identified by NMMT. During the term of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance Ruling Authority, Maharashtra in In Re: SST Sustainable Transport Solutions India Pvt. Ltd. [2019 (20) G.S.T.L. 317 (A.A.R. - GST)] wherein in a similar situation to the present facts, the Authority held that the applicant was rendering services to Nagpur Municipal Corporation, by way of giving out on rent/hire, buses which were further used by NMC for transportation of passengers. Such renting of buses by the applicant squarely fell under Sr. No. 10, Heading No. 9966, sub clause (ii) as rental Service of transport, vehicles, in this case with operators and therefore attracted CGST and SGST @ 9% each on remuneration received for such services rendered by the applicant." 2.9 As per Entry no. 3 of the Exemption Notification, "Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit). 2.12 However, if the authority decides that the services are not covered under Entry 10(i) of the Rate Notification, tax shall be payable at the rate of 18% under residuary Entry 10(iii) which reads as follows: "Rental services of transport vehicles with operators, other than (i) and (ii) above" 2.13 Hence, the services to be provided by the Operator shall be classified under SAC Code 9966: "Rental services of transport vehicles with operators" eligible to GST at the following rates: (i) 12%, if the authority decides that services are covered by Entry 10(1) of the Rate Notification; or (ii) 18%, if the authority decides that services are not covered by Entry 10 (iii) of the Rate Notification. Availability of input tax credit to the Applicant 2.14 Under Entry 10(i), as the services provided by the Applicant are taxable, the Applicant shall be eligible to avail the input tax credit of tax paid on the procurement of input supplies used for supplying services to NMMT, if the Applicant opts to pay tax at the rate of 12% under Entry 10(1). Further, even if the tax is payable under Entry 10(iii) at the rate of 18%, the Applicant shall be eligible to avail the input tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ble Uttarakhand High Court judgment in case of CCE V/s Sachin Malhotro [2014 (10) TMI 816): 2.19 Based on the aforesaid submissions and judicial precedents, it may be concluded that transaction between the Applicant and NMMT is in the nature of "renting of motor vehicle" and "not of hiring". As a consequence, the same shall not be exempt in terms of Serial No. 22 mentioned above. As the transaction undertaken by the Applicant is in the nature of 'renting of motor vehicle, the same shall be taxable in terms of Sr. No. 10(i) of Notification No. 11/2017 - CTR dated 28.06.2017. The Applicant shall have an option to pay GST at the rate of 12% (with input tax credit). 03. CONTENTION - AS PER THE CONCERNED OFFICER: The jurisdictional/concerned officer has not made any submissions in the matter. 04. HEARING 4.1 Preliminary e-hearing in the matter was held on 09.11.2021 The Authorized representative of the applicant, Shri. Pranav Pagariya, learned CA, Shri. Nishant Shah, learned advocate and Shri. Mayur Pawaskar, Manager were present. The Jurisdictional officer was absent. The Authorized Representatives made oral submission with respect to admission of their application. The Appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lying as per directions and control of BEST; applicant was not free to use the said buses for any purpose other than complete dedication to BEST; the buses were parked only in the depots, owned by BEST; applicant had no right and/or authority in deciding the routes, schedules and the frequency of the buses and to decide the fares. All the buses were painted in red colour and were embodied with "BEST" logo on all sides. The drivers were also under the administrative control of BEST, who decided the routes for them. (iii) the consideration for supply of service was charged from BEST and not the passenger. Therefore, the recipient of service was BEST. Hence, the said activity, amounted to 'renting of motor vehicle' and qualified as a taxable activity under the provisions of the GST Laws and the case was clearly covered by Entry Sr. No. 10 of Notification No. 11/2017 - CT (Rate) dated 28.06.2017 in as much as there was a Rental services of transport vehicles with or without operators. 5.4 In the subject case, the applicant has entered into Operator Agreement dated 25 February 2020 with the Navi Mumbai Transport Undertaking ("NMMT") as per which the following are also include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 12/2017-CT (R) dated 28.06.2017 is not applicable in the subject case. The subject case is clearly covered by Entry Sr. No. 10 of Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended in as much as there is a Rental services of transport vehicles with or without operators and the activities of Renting of any motor vehicle/transport vehicle which is designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient are chargeable to either 2.5% GST or 12% GST depending on availment of Input Tax Credit. Therefore in the subject case since there is a Renting of motor vehicle/transport vehicle which is designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient i.e. NMMT, the applicant will have to pay GST @ 5%, if credit of input tax charged on goods and services used in supplying the service, other than the input tax credit of input service in the same line of business (i.e. service procured from another service provider of transporting passengers in a motor vehicle or renting of a motor vehicle) has not been taken. If credit of input tax charged on goods and s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
