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

Company's 18% GST on Truck Rentals to GTA Challenged; ITC Denied Under Notification 12/2017 and SAC 996601 Classification. A Limited Company rented trucks without drivers to a Goods Transport Agency (GTA) and charged an 18% GST, claiming eligibility for Input Tax Credit (ITC) under SAC 996601. The department argues that, per Notification 12/2017, such services are exempt from GST, disallowing ITC on truck purchases. Respondents agree with the department, noting that SAC 996601 pertains to renting with an operator, thus questioning the company's classification. The consensus is that renting to GTA is exempt, and ITC is not applicable for such transactions.