Renting of Trucks to GTA

[sri sri]

Limited Company rented (monthly Rental with out driver) out trucks which are used for transportation and charged GST @18% to GTA which is a proprietory which is also charging GST @ 18% to its clients.

The Limited adopted SAC 996601 and collected GST @18% and availed ITC on purchase of trucks and other expenses incurred for repair of trucks.

Department view Notification 12/2017 exempt the Hire to GTA. Since the service is exempted the Limited Company can not avail ITC on purchase of lorries.

The company view: SAC 996601 is for Renting and Rate given 18%. Collect and paid hence eligible to avail ITC.

Please Clarify.

[Shilpi Jain]

Renting of vehicle to GTA is exempt and thereby itc not eligible. For an unconditionally exempt supply no option of paying tax as per section 11

[KASTURI SETHI]

Dear Querist,

The department is absolutely right.

SAC 996601 clearly talks of 'Renting out motor vehicles with operator' . How can you classify your service without driver under SAC 996601 ?

I agree with the views of Madam Shilpi Jain.

[CA Hemanth Kumar]

Dear sri sri

Services by way of giving on hire to (b) to a goods transport agency, a means of transportation of goods would be exempt from GST. Further these exemption covers both the SAC

i. 9973 (Leasing or rental services, 100[***] without operator)

ii 9966 (Rental services of transport vehicles 96[with operators])

AI Summary

Exemption for renting vehicles to goods transport agencies bars input tax credit where the supply of transport to a GTA is made.
Renting motor vehicles to a goods transport agency is an exempt supply that precludes the supplier from claiming input tax credit on purchases and expenses related to those vehicles; classification under a taxable renting code or labeling the service without operator does not permit paying GST and availing ITC when the supply is unconditionally exempt under the relevant notification.