AAR Odisha: ITC is admissible on rental/hiring services to assessee engaged in providing transport service & opting forward charge
In the case of EFC Logistics India Pvt. Ltd. (GST AAR Odisha), M/S EFC Logistics India Pvt Ltd (referred to as the ‘Applicant’), filed an application for an advance ruling under Section 97 of the CGST Act, 2017, and the corresponding section of the OGST Act. The Applicant is a Goods Transport Agency (GTA) registered under the GST provisions, providing transport services to M/s Rungta Mines Ltd., and paying GST at a rate of 12% under the Forward Charge Mechanism with input tax credit (ITC).
The Applicant has sought ruling in respect of the following questions.
1.Whether the supplier,being the owner of the vehicle itself, can charge GST on rental/hiring services under the Forward Charge Mechanism even though his service is exempted.
2.If the answer to question above is “yes”, whether the Applicant being a Goods Transport Agency, be able to claim the Input Tax Credit in terms of Section 16 of GST Act 2017, on the basis of suppliers invoices.
Ruling
Question 1: Chargeability of GST on Rental/Hiring Services
The Odisha Authority for Advance Ruling (AAR) assessed whether the supplier can levy GST on rental/hire services under the Forward Charge Mechanism. However, they discovered that this question is not carried u/s 95(a) of the CGST Act, 2017. As per section, an advance ruling related to matters or questions specified in Section 97(2) or Section 100(1), concerned with the supply of goods or services undertaken or proposed to be undertaken by the Applicant. As the Applicant is not the supplier of the rental services, the question is not within the purview of the advance ruling, and thus, no ruling can be furnished on this end.
Question 2: Eligibility for Input Tax Credit (ITC)
The AAR examined the eligibility for ITC under Section 16 of the CGST Act, 2017, which states that every registered person is entitled to ITC on goods or services used or intended to be used in the course or furtherance of business. The Applicant, being a GTA and registered under GST, paying 12% GST under the Forward Charge Mechanism, is eligible to claim ITC, subject to fulfillment of conditions and restrictions specified in Section 16 of the CGST Act, 2017.
The Copy Of the Order is as Under:
From,
Krishnakant Jakhotia
Mobile No :- 9422507911
Email Id :- taxtalknew@gmail.com
