GST on Hire Vehicle given to Oil PSU like IOCL

[NARENDER YARRAGORLA]

If a Filling Station has one truck and given the same vehicle hire basis to Indian Oil Corporation. In the given situation, who is liable to pay tax either Filling station under FCM or the PUS under RCM or none of them as it is exempted?

[Rajagopalan Ranganathan]

Sir,

It is Filing Station who rented out the truck to Indian Oil Corporation has to pay GST.

[Shilpi Jain]

Renting of motor vehicle is also liable under rcm. However that is when tye service is provided to a body corporate and when the rate of tax is other than 12 percent

[SOWMYA CA]

Narender, You have to read the terms of the agreement between IOCL and the filling station. If the contract is of hiring of truck on a monthly basis without regard to the number of kilometers run by the vehicle then it becomes chargeable to tax on forward charge basis. However, if the contract terms are on trip basis, then the contract becomes goods transport agency contract leviable under RCM basis @ 5% if not opted for fwd charge @12%

[Shilpi Jain]

Renting of motor vehicle is under RCM only if it is for transport of passengers. In your case since the vehicle is for transport of goods, RCM will not be applicable if it is a rental arrangement.

[SOWMYA CA]

2(ze) -Goods transport agency‛ means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. In this case, the Filling station qualifies as a GTA if they provide transportation services to IOCL on consignment basis and not monthly rental. Therefore RCM liability on the recipient being IOCL under GTA services.

[KASTURI SETHI]

RCM is not applicable. The activity of Filling Station is not GTA service. It is not exempted service. This service is under FCM.

[SOWMYA CA]

I agree with Kasturi sir, a filling station cannot be a GTA but the definition of GTA seems so wide to accommodate any person who provides transportation services. However such a interpretation may not hold good. One needs to review the contract between them whether the vehicle is hired /leased with / without driver and then arrive at the classification /rate.

[KASTURI SETHI]

Yes. Terms and conditions of the contract is determinant factor to arrive at correct classification and rate of tax.

However, Indian Oil Corporation is body corporate.

[Ganeshan Kalyani]

Goods Transport Agency is a third person between consignor and consignee. Here Filling Station is not a GTA as he is not the third person. In fact he has given the vehicle on hire (as mentioned in querist query). The arrangement may be of renting of vehicle. Hence forward charge is applicable, in my view.

[CA Hemanth Kumar]

Filing station has to pay tax under FCM.

Services may not fall under GTA as

1. Nature of services will be of rental

2. There wont be any concept of issuing consignment note.

In case if the services are in the nature of transportation of goods and not as a vehicle renting, said services would be exempt from GST in terms of S.No 18 of Notification No,.12/2017 CT(R).

Services by way of transportation of goods-

(a) by road except the services of-

(i) a goods transportation agency;

(ii) a courier agency;

(b) by inland waterways

AI Summary

Vehicle hire: forward-charge GST applies to owner; GTA classification shifts liability to recipient for consignment services. Whether GST is payable by the filling station or the recipient depends on classification: where the supply is rental of a motor vehicle on periodic hire, GST is payable on a forward-charge basis by the provider; where the service qualifies as Goods Transport Agency service with consignment notes, liability may shift to the recipient under reverse charge. Contract terms-rental versus trip/consignment basis, consignment notes, and operational control-are determinative, and exemption provisions for road transport services may further affect taxability.