GST on rental services of self-propelled access equipment (Boom Scissors/ Telehandlers).

GST DOST's NEWS

GST on rental services of self-propelled access equipment (Boom Scissors/ Telehandlers).

Facts

The equipment is imported at GST rate of 28% and leased further in India where operator is supplied by the leasing company, diesel for working of machine is supplied by customer and transportation cost including loading and unloading is also paid by the customer.

Clarification

Leasing or rental services, with or without operator, for any purpose are taxed at the same rate of GST as applicable on supply of like goods involving transfer of title in goods. Thus, the GST rate for the rental services in the given case shall be 28%, provided the said goods attract GST of 28%. IGST paid at the time of import of these goods would be available for discharging IGST on rental services. Thus, only the value added gets taxed. [Sl. No 17(vii) of notification No. 11/2017- CT(Rate) dated 28.6.17 as amended refers].

 

LEASING GST RATE TABLE

Description of Service

Rate (per cent.)

Condition

(i) Temporary or permanent transfer or permitting the use or enjoyment of

intellectual Property (IP) right in respect of goods other than Information Technology software.

6

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(ii) Temporary or permanent transfer or permitting the use or enjoyment of Intellectual Property (IP) right in respect of Information Technology software. 

 "information technology software” means any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form, and capable of being manipulated or providing interactivity to a user, by means of a computer or an automatic data processing machine or any other device or equipment.

9

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(iii) Transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration.

Same rate of central tax as on supply of like goods involving transfer of title in goods

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(iv) Any transfer of right in goods or of undivided share in goods without the transfer of title thereof.

Same rate of central tax as on supply of like goods involving transfer of title in goods

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(v) Leasing of aircrafts by an operator for operating scheduled air transport service or  scheduled air cargo service by way of transaction covered by clause (f) paragraph 5 of Schedule II of the Central Goods and Services Act, 2017.

Explanation.- 

(a) “Operator” means a person, organisation or enterprise engaged in or offering to engage in aircraft operations;

(b) “Scheduled air transport service” means an air transport service undertaken between the same two or more places operated according to a published time table or with flights so regular or frequent that they constitute a recognisable systematic series, each flight being open to use by members of the public;

(c) “Scheduled air cargo service” means air transportation of cargo or mail on a scheduled basis according to a published time table or with flights so regular or frequent that they constitute a recognisably systematic series, not open to use by passengers.

2.5

Provided that credit of input tax charged on goods  used  in supplying the service has not been taken [Please refer to Explanation   no. (iv)]

(vi) Leasing of motor vehicles purchased and leased prior to 1st July 2017;

Note:- Nothing contained in this entry shall apply on or after 1st July, 2020.

65 per cent. of the rate of central tax as applicable on supply of like goods involving transfer of title in goods.

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(vii) Time charter of vessels for transport of goods.

2.5

Provided that credit of input tax charged on goods (other than on ships, vessels including bulk carriers and tankers) has not been taken [Please refer to Explanation no. (iv)]

(viii) Leasing or rental services, with or without operator, other than (i), (ii), (iii), (iv), (v), (vi) and (vii) above.

Same rate of central tax as applicable on supply of like goods involving transfer of title in goods.

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