TaxTMI 
TaxTMI 
2024 (11) TMI 328
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....e under. 3. The applicant requested advance ruling on the following: 3.1 Whether the services rendered by the applicant fall under the chapter 99, heading 9973 and service code 997311? 3.2. Whether the rate provided in notification no 11/2017-Central Tax Rate dated 28.6.2017 as amended vide notification No 20/2019 Central Tax (Rate) under the Sl no 17 (viii) is applicable for the services rendered by the Applicant and the applicable GST rate of tax is 18%? 4. Contentions of the Applicant: 4.1. The applicant provides the services of renting of motor vehicles. Vide notification No. 11/2017 Central Tax (Rate) for heading 9966 as it stood prior to its amendment, rate of tax for renting of motor cab with or without operators was 18%. Subsequently vide Notification No 20/2019 Central Tax (Rate) this heading was restricted to rental services of transport vehicles with operators. Prior to the amendment, the applicant billed their rental services under SAC code 996601, at 18% GST. Since the applicant provides cars without operators, presently the applicant is classifying the same service under code 997311. 4.2. The gist of the application filed by the applicant is whether the services....
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....he matter, documents on record and submissions both oral and written, made by the applicant as well as the jurisdictional officer. To answer the questions raised by the applicant, it has to be determined whether the service provided by the applicant falls under SAC 9966 or 9973, and if under 9973, whether under Sl. No. 17 (iii) or 17 (viii) of Notification No 11/2017-Central Tax (Rate) dated 28-06-2017. The description and tax rate of these services are discussed below. 7.2. The service offered by the applicant is supply of vehicles without operator. After the amendment introduced vide Notification No 20/2019 Central Tax (Rate) dated 30-09-2019, the SAC 9966 includes only rental service of transport vehicle 'with operator' and thus now the said SAC is does not cover the service rendered by the applicant, which is rental without operator. Hence, we find that the apt SAC for the service rendered is 9973. 7.3. The general heading (9973) covers leasing or rental services, with or without operator. Under sl. No. 17 (iii) of Notification No 11/2017, the services covered are "Transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferre....
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.... d) For the period during which the transferee has such legal right, it has to be the exclusion to the transferor this is the necessary concomitant of the plain language of the statute viz. a "transfer of the right to use" and not merely a licence to use the goods; e) Having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others. 7.8. Relying on the above guidelines, in the recent judgment of K.P. Mozika v. ONGC Ltd etc. [2024] 1 S.C.R. 488, the Supreme Court dwelled on a similar question as to whether hiring of motor vehicles give rise to transfer of right to use any goods and amount to sale under Art. 366 (29A) (d). At para 33, the Court observed as follows: "Thus, to decide the controversy involved in this group of appeals, the contract between the parties will have to be tested on the touchstone of the five tests laid down by Dr AR Laxmanan, J in the case of BSNL. Thus, the contract will be covered by subclause (d) of Clause 29A of Article 366, provided all the five conditions laid down are fulfilled. This Court has made a distinction between transferring the right to use and m....
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..... 7.13. Based on the above details in the agreement, applying the five tests laid down in the BSNL case, we find that in the case of the applicant, a) The cars are available for delivery. b) There is consensus ad idem as to the identity of the goods. c) Though the user has a legal right to use the goods, all legal consequences of such use including any permission or licences required are not available to them. The user does not own the RC of the car in question, even temporarily, and the insurance and other formalities are with the transferor only. d) For the period during which the transferee has such legal right, we find that it is not to the exclusion to the transferor. The transferee can use the car only as stipulated by the transferor and cannot put it to any other use including commercial use. e) Having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others. We find that since the item involved is a car which cannot be put to use by more than one person at a time, the same right cannot be allowed to two persons at a time. 7.14. In light of above discussions, we are of th....