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 on Renting Agricultural Machinery Explained; ITC Eligibility Depends on Use for Taxable Services A query was raised about the applicability of GST on renting or leasing agricultural machinery like harvesters or combines and the eligibility for Input Tax Credit (ITC) on their purchase. The response clarified that renting or leasing agricultural machinery is exempt from GST according to specific notifications, provided certain conditions are met. ITC is not admissible if the machinery is used for exempted services, but it is admissible if used for taxable output services, provided the service falls under the exclusion clause.