TaxTMI 
TaxTMI 
2021 (8) TMI 892
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....this Advance Ruling, the expression 'GST Act would be a common reference to both CGST Act and TGST Act. 3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- for SGST and Rs. 5,000/- for CGST towards the fee for Advance Ruling. The concerned jurisdictional officer also raised no objection to the admission of the application. The application is therefore, admitted 4. Brief facts of the case: M/s Deccan Transcon Leasing Private Limited (DTLPL) are Non-vessel owner container carriers/ Operators (NVOCC) who arc based in India but lease containers from suppliers outside the country and in turn use it in transportation of bulk chemicals The applicant entered into a lease purchase agreement from M/s. Tankspan Leasing Limited (TLL) on 28.08.2018. In terms of this agreement the applicant pays lease rentals every month and he is entitled for the purchase of the container during the period of lease or at the end of the lease period by paying the agreed rate. The applicant submits that they have recognized the tank containers and assets in the....
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....as valid and relics on (2000) 120 STC 1. That as per the agreement the applicant is entitled to purchase the tank upon payment of pre agreed price mentioned therein and the lease rentals paid adjusted against the purchase price. That the applicant recognised these containers as asset in his books of account from the inception of the lease due to the certainty of acquisition at a future date. Therefore the applicant averred that the transaction is one for purchase of goods and not for lease service. Further they averred that such goods have never entered the territory of the country and therefore do not attract any tax under CGST/IGST Acts. The applicant relied on Mohit minerals Vs UOI (2020) 33 GSTL 321 (GUJ) wherein it was held that the transaction occurring totally outside India is not liable for GST in India. 5. Questions raised: Based on the facts mentioned hereinafter, the applicant sought Advance Ruling on the following issues:- 1. Is GST liable to be paid on leasing of tank containers taken form a supplier i.e., lessor who is located outside India and the tank containers do not reach India? As it is finance lease, it is supply of goods and tank contai....
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....saction made by them as purchasers is not taxable as the goods never entered the territory of the country. In this connection it is to inform that the constitution has been amended to include Entry 12A in the Article 366 which enables levy of tax on supply of goods & services except on alcoholic liquor for human consumption. Further the definition of goods in the Section 2(d) of the CST Act is amended to include only petroleum and liquor and Section 2(g) has to be applied only to the goods enumerated in Section 2(d). Therefore sales tax under CST Act can be levied only on these goods whereas tax on supply of goods and services is levied under CGST/SGST and IGST Acts. Hence the above argument of the applicant is not sustainable in light of the amendments to the constitution of India and the concomitant amendments to the GST and VAT Acts. ii. Further under Accounting Standard-19 of Accounting Standards of India the Ieased Asset will be shown in the books of lessee and this does not alter the nature of a lease transaction. However the question remains whether the applicant is recipient of goods & services under the GST Act which will be discussed below. iii. The applicant ....
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....ler in this matter. The copies of sample agreement are examined in light of this discussion as follows: The applicant has entered into an agreement for leasing goods from a foreign lessor. The relevant terms and conditions in the lease agreement are as under:- a. "The Title of the Agreement is named as Lease Purchase Agreement" b. In the agreement, it is stated that in consideration of terms and covenants.............lessor agrees to lease to the lessee and the lessee agrees to hire from lessor... tank containers identified (Para A of the agreement). c. The term of the lease shall commence...on the date of delivery of lessee of such container and shall continue for each container for a minimum period of 5/2 years (Para B of the agreement). d. The lessee shall pay an amount at a daily rate of US $ 10.20 per container. At the expiry of term of lease purchase, ...and that no event of default has occurred, the lessee shall purchase all such containers on lease. ... Upon such receipt of payment by lessor from lessee for full payment for the term of lease, such title of ownership shall pass to lessee (Para C of the agreement). e. Upon....
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....it an obligation on the part of contracting parties to necessarily transfer such property. c. The agreement which shall not leave any option for return of the goods. d. The terms in the copies of agreements submitted by the applicant it is amply clear that the leasee may or may not take final possession of the goods. As per the statutes there is a binding obligation on the parties to the agreement to complete the sale i.e. Transfer of title as well as property whereas in the present case there is no such obligation but there is an option for the lessee to either purchase the goods or return them to the lessor. There is even a clause in the agreement as to the (condition and) place where the goods can be returned on termination of the lease. Where there is such an option available to the lessee, the transaction does not fall under entry 1(c) of Schedule II to the CGST Act, 2017. In K.L. Jahar & Co, Vs Dy. Commercial Tax Officer, AIR 1965 SC 1083 it has been held that a hire purchase agreement is distinct from a sale in which the price is to be paid Iater by instalments, In the case of sale in which the price is to be paid by installment, the property passe....