My Client has provided vehicles for the Goods Transportation not entered into any agreement with GTA. Vehicle are given him on Fixed KM basis. Further the Cost of Fuel and Driver Salary is paid by my Client.
Is it considered as Hiring of Vehicles as the Cost of Fuel is included?
Whether the Vehicle Hiring provided to GTA is exempt from GST
Client providing vehicles to goods transportation agency on fixed kilometer basis qualifies for GST exemption under Notification 12/2017 A client provided vehicles to a goods transportation agency on a fixed kilometer basis, with the client paying fuel costs and driver salaries. The query addressed whether this constitutes vehicle hiring and if such services to GTAs are GST-exempt. Legal experts clarified that this arrangement is considered 'renting' rather than 'hiring' of vehicles under GST notifications. The service is exempt from GST when provided to GTAs under Notification No. 12/2017-Central Tax, specifically covering services under SAC codes 9966 or 9973. However, an agreement supporting the GTA relationship is recommended for documentation purposes, though not legally mandatory for the exemption to apply. (AI Summary)
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