2022 (7) TMI 1100

X X X X Extracts X X X X

Full Text of the Document

X X X X Extracts X X X X

...., for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or MP GST Act would be mentioned as being under the GST Act. BRIEF FACTS OF THE CASE AND SUBMISSION OF THE APPLICANTS IN THEIR APPLICATION IS AS UNDER - 3.1. The Applicant seeking advance ruling regarding the taxability of the said services & input to be taken on buses and repairs and Maintenance Expenses as same is allotted with the work through Tender Process. 3.2. The Service Recipient companies BCLL, AICTSL, and JCTSL is State Govt. Company. 3.3. The Service Recipient companies will be paying the service provider on the total effective run kilometre. 3.4. Applicant is providing non AC buses with Drive, Fuel, Repairs and Maintenance of buses. 3.5. Route of the buses & the applicable fare will be decided by service Recipient and provide the transportation services to passenger. 4. QUESTION RAISED BEFORE THE AUTHORITY - The Applicant has submitted application u/s 97(1] of CGST Act & MP GST Act seeking Advance Ruling on the following questions;- I] whether tax is applicable on supply of services to BCLL, AICTSL, JCTSL (State Government Co.) Il)....

X X X X Extracts X X X X

Full Text of the Document

X X X X Extracts X X X X

....e Routes for the conveyance of public. 6.3 Main Object of the company formed a special purpose vehicle To establish and maintain line of passenger's coaches and other vehicles generally to transport passengers and to purchase, charter, hire build and otherwise acquire passenger coaches and buses to let out, hire or charter or otherwise deal with and dispose off any such coaches and buses. As per RFP the object of the Tender The actions seek to promote the Organized Public Transport, reduce the use of private vehicles and to develop a mass transport of passenger service in city. The Public Transport System in city is being developed and implemented through a Special Purpose Vehicle (SPV), as a strategy for solving the mobility problems of the city under the perspective of prioritizing the mass public transport system as opposed to individual I unorganized transport systems in order to structure an integrated transport system which offers higher safety, quality, security and reliability from users of Public Transport Corridors with the highest passenger demand in city. SPV shall ensure operation on business lines with "Good Industry Practice" using a Public Private....

X X X X Extracts X X X X

Full Text of the Document

X X X X Extracts X X X X

....dered. ii. The Operator shall make available the bus for minimum service hours as decided by BCLL. In case a bus is not made available for service hours as decided by BCLL in a day, it will not be counted as a day for the purpose of reckoning the number of days operated in a month. iii. In case of cancellation of kilometers trips for any reason payment shall be made for actual km operated. iv. Bus Kilometers shall not constitute the following: 1. Any kilometres travelled by the Contracted Bus to a maintenance facility set up by the Operator at the Bus Depot/Parking Space provided by BCLL or for any travel not authorized by BCLL. 2. Distance travelled by a Contracted Bus to fuelling facility set up by the Operator at the Bus Depot/Parking Space provided for by BCLL. 3. Kilometres from the point of the breakdown to the destination point in case of break down wherein BCLL can divert the passengers to any other hired bus of BCLL. v. Increase in route kilometre due to enforcement of law and order shall not be reckoned for hire charges where BCLL has not changed its fare structure. vi. Operator is free to keep spare diesel buses for smooth runnin....

X X X X Extracts X X X X

Full Text of the Document

X X X X Extracts X X X X

....f vehicles to State Transport Undertakings and Local Authorities 6.6.1 Representations have been received seeking clarification regarding eligibility of the service of renting of vehicles to State Transport Undertakings (STUs) and Local Authorities for exemption from GST under notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. SI.No . 22 of this notification exempts "services by way of giving on hire (a) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers: or (aa) to a local authority, an Electrically Operate vehicle meant to carry more than twelve passengers". 6.6.2 This issue has arisen in the wake of ruling issued by an Authority for Advance Ruling that the entry al SI. No. 22 of notification No. 12/2017-Central Tax (Rale) exempts services by way of giving on hire vehicles to a State Transport Undertaking or a local authority and not renting of vehicles to them. The ruling referred to certain case laws pertaining to erstwhile positive list based service tax regime. 6.6.3 It is relevant to note in this context that Schedule II of CGST Act. 2017 declares supply of any goods without transfer of title as supply of servi....

X X X X Extracts X X X X

Full Text of the Document

X X X X Extracts X X X X

....second and third questions come into picture only if in reply to the question relating to taxability, the supply is held to be taxable. Therefore, we first proceed to decide the question regarding taxability. 7.5 The questions relate to applicability of a notification, eligibility to ITC and taxability of outward supply which are covered u/s 97(2)(b). 97(2)(d) and 97(2)(e) respectively. Therefore, the application is admissible. 7.6 The applicant has furnished the following documents in evidence of the scope of the work being done and to establish the nature of the supply of service being made by the applicant:- - NIT NO. 458 AICTSL/Transport/Jan-2020/1st Call for selection of Bus Operators for Intra City Bus service in Indore City on Procure. Operate and Maintain Basis": - Agreement with Atal Indore City Transport Services Limited dated 14.01.2021; - Agreement with Bhopal City Link Limited dated 12.11.2020; - Agreement with Jabalpur City Transport Services Limited dated 12.11.2020; - Memorandum and Articles of Association of Bhopal City Link Limited: - Letter dated 29.10.2021 from Jabalpur City Transport Services Limited r....

X X X X Extracts X X X X

Full Text of the Document

X X X X Extracts X X X X

.... 2.5 Provided that credit of input tax charged on goods and services used in supplying the service, other than the input lax credit of input service in the same line of business (i.e. service procured from another service provider of transporting passengers in a motor vehicle or renting of a motor vehicle) has not been taken. [Please refer to Explanations. (iv)] Or 6 - (emphasis supplied) b) 12/2017 -Central Tax : 22 Heading 9966 or Heading 9973 Services by way of giving on hire - (a) to a stale transport undertaking, a motor vehicle meant to carry more than twelve passengers; or (aa) to a local authority, an Electrically operated vehicle meant to carry more than twelve passengers; or Explanation. - For the purposes of this entry. "Electrically operated vehicle" means vehicle falling under Chapter 87 in the First Schedule to the Customs Tariff Act, 1975 (5 1 of 1975) which is run solely on electrical energy derived from an external source or from one or more electrical batteries fitted to such road vehicle.'. (b) to a goods transport agency, a means of transportation of goods. (c) motor vehicle for transport of students, faculty and s....

X X X X Extracts X X X X

Full Text of the Document

X X X X Extracts X X X X

....yment. Il also amounts to engaging temporary use. It cannot be disputed that both in "renting" and "licensing", de facto possession of the thing is enjoyed. Difference is well carved out under the law wherein both, de jure possession and control is given, but in "renting". it is right-in-rem whereas in "licensing", it is right-in-persona. When rent- a-cab scheme operator gives the car on rent, de facto possession is. of course, there but. it is not acceptable to uphold that wherever de jure control and possession of the vehicle stands transferred in law from the owner to the person on renting/hiring the service that the service lax is leviable and this is. of course, not different than services rendered on a contractual basis, providing transport service for fixed amount of periodical return or fare. We need not be oblivious of the fact that for the purpose of regulating the business of renting of motor cabs or motor cycles to persons who are desirous of driving by themselves or through drivers, either for their own use or for any matters connected herewith, the scheme is made by the Central Government. Conceptually and essentially, if the nature of servi....

X X X X Extracts X X X X

Full Text of the Document

X X X X Extracts X X X X

....er similar local authority. Explanation.- For the purposes of this clause, "road transport service" means a service of motor vehicles carrying passengers or goods or both by road for hire or reward; As per ROC, submitted by the applicant .of Atal Indore City Transport Service Limited. Bhopal City Link Limited and Jabalpur City Transport Services Limited are companies submitted by the applicant Stale Government companies. 7.16 On a joint reading of the terms of the agreement, high court rulings. Entry No. 10 of Notification No. 11/2017 - Central Tax (Rate) and Entry No. 22 of Notification No. 12/2017 - Central Tax (Rale) it appears that supply covered under the agreement entered into by the applicant with AICTSL is covered under Entry No. 22 of Notification No. 12/2017 - Central lax (Rate) and is an exempt services. 7.17 Our view is further supplemented by para 8 of Board Circular No. 164/20/2021 GST dated 06.10.2021. wherein it has been clarified on the recommendation of the GST Council that "giving on hire" in Entry No. 22 of Notification No. 12/2017 - Central Tax (Rate) includes renting of vehicles. 7.18 Once the supply is exempt, the question relating to rat....

X X X X Extracts X X X X

Full Text of the Document

X X X X Extracts X X X X

X X X X Extracts X X X X

Full Text of the Document

X X X X Extracts X X X X

X X X X Extracts X X X X

Full Text of the Document

X X X X Extracts X X X X

X X X X Extracts X X X X

Full Text of the Document

X X X X Extracts X X X X