Renting/leasing of agriculture machinery

[KARAN VERMA]

Whether GST applicable on renting/leasing of harvester/ combine for agriculture purpose.

whether company cllaim ITC on purchase of harvester/combine.

[KASTURI SETHI]

(1) Renting/leasing of agricultural machinery is exempted from GST vide Notification No.12/17-CT(R) dated 28.6.17 as amended up to 30.9.19 at Serial no.54(f) HSN 9986 and Notification No.11/17-CT(R) dated 28.6.17 as amended up to 22.11.19 at Serial no.24 (d). Conditions mentioned therein are to be fulfilled.

(2) Since harvester/combine (agricultural machinery) is to be used for supplying exempted service, ITC is not admissible. If used for taxable output supply of service, ITC is admissible (if supply of service is in exclusion clause).

AI Summary

GST exemption for agricultural machinery rental excludes input tax credit unless machinery is used for taxable services. Renting or leasing of agricultural machinery is exempt from GST under the cited notifications when prescribed conditions are met. Consequently, input tax credit on purchase of a harvester/combine used to provide the exempt service is not admissible; if the machinery is used to supply taxable services, ITC is admissible to the extent of taxable use.