services provided to municipal corporation

[giri gattupalli]

Respected Sir,

One of my client provided machinery on lease to the person who entered direct contract with municipal corporation for sewage processing .and our machinery is used for sewage processing purpose. whether lease amount received by my client exempted or not

please discuss

thanking you

giri

[KASTURI SETHI]

Sh.Giri Gattupalli Ji,

Your client provided (supplied) service (leased machinery) to the contractor and the contractor further provided (supplied) service i.e. leased machinery to Municipal Corporation for sewage. Your client is providing to the contractor and not to Govt.etc. Your client is not eligible for exemption. Also go through the following decision of AAR, Karnataka

2020 (3) TMI 70 - AUTHORITY FOR ADVANCE RULING, KARNATAKA IN RE : M.V. INFRA SERVICES PVT. LTD.

[Ganeshan Kalyani]

I fully agree with the views of Sri Kasturi Sir. You client engaged with a person and not Govt. directly so no exemption and tax is payable.

AI Summary

Lease Payments for Machinery to Contractor Not Exempt from GST, Authority for Advance Ruling Confirms A client leased machinery for sewage processing to a contractor who has a direct contract with a municipal corporation. The client is inquiring whether the lease payments are exempt from Goods and Services Tax (GST). Two responses clarify that since the client is providing machinery to a contractor and not directly to the government, the lease payments are not exempt from GST. Both respondents agree that tax is payable, referencing a decision by the Authority for Advance Ruling, Karnataka, which supports this interpretation.