XYZ (Manufacturer) have a commercial vehicle for transportation of goods and wants to provide the vehicle on hire to PQR(Manufacturer) for the transportation of Goods and for which there will be a monthly billing on the basis of number of trips and locations where the goods have been transported. Both are in the same state.
1) What will be Rate of GST to be charged on the Invoice by XYZ to PQR? And
2) The nature of Service (Whether this can be treated as GTA service or not?).
GST Implications on Hiring Commercial Vehicles: Exemption Criteria and Differences Between 'Hire' and 'Rent' Explained. A discussion on the Goods and Services Tax (GST) implications for hiring a commercial vehicle for transporting goods. A manufacturer, XYZ, intends to hire out a vehicle to another manufacturer, PQR, with queries about the applicable GST rate and whether the service qualifies as a Goods Transport Agency (GTA) service. Responses clarify that hiring trucks is exempt under certain notifications, but not considered GTA service. The debate extends to defining 'hire' versus 'rent,' with emphasis on control and the implications for GST exemptions. The consensus suggests that exemptions apply only when the vehicle is hired by a GTA. (AI Summary)
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