TaxTMI 
TaxTMI 
Regarding uploading of one order passed by Delhi Authority for Advance Ruling (DAAR), of GST portal of Trade & Taxes Department.
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....he earliest with intimation to this branch. AC/GSTO (DAAR) Enclose: - As above ============= Document 1 GOVT. OF NCT OF DELHI OFFICE OF THE DELHI AUTHORITY FOR ADVANCE RULING DEPARTMENT OF STATE TAX 7th Floor, Vyapar Bhawan, I.P. Estate, New Delhi-110002 PROCEEDINGS OF THE AUTHORITY FOR ADVANCE RULING UNDER SECTION 98 OF THE GOODS AND SERVICES TAX ACT, 2017 Members present: Shri Bhavan Lal Meena, I.R.S. Member (Centre)/Additional Commissioner Delhi Authority for Advance Ruiling O/o the Principal Chief Commissioner of CGST & Central Excise, Delhi Zone, New Delhi - 110002 Smt. Asha Chaudhary, Member (State)/Additional Commissioner Delhi Authority for Advance Ruling, Govt. of NCT of Delhi, Vyapar Bhavan, I.P. Estate, New Delhi - 110002 Advance Ruling No. 13/DAAR/2025 Dated: 01/10/2025 1. Any appeal against this Advance Ruling order shall lie before the Delhi Appellate Authority for Advance Rulings, New Delhi as under Sub-Section (1) of Section 100 of CGST Act / DGST Act 2017, within 30 days from the date on the ruling sought to be appealed is communicated. 2. In terms of Section 103(1) of the Act, Advance Ruling pronounced by the Authority under Chap....
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....encies subject to provisions of GST law. The entire scope of services by the applicant to DOT, Govt. of NCT of Delhi will be providing air- conditioned buses with drivers including fuel, repairs and maintenance of the buses without any right to collect fares, fines or penalties from the passengers that will be collected by the DOT direct and the entire revenue will be collected in their name. The DOT shall pay to the applicant service charge on "Gross Cost Model" basis that is discussed in the agreement dated 28.09.2019. The Applicant has been advised its services shall be covered under Notifications issued from time to time and will be subjected to a GST rate of 12 percent with full availability of input tax credit. Applicant has sought advance ruling on the issue of Whether the outward transportation services provided by the applicant are subject to output tax and if so what is the rate applicable to such outward transportation services based on the enclosed Agreement with the Govt of NCT dated 28.9.2019 where the service is all- inclusive including fuel and the operator of the busses? And if such services are subject to tax, is there any restriction to claim an input tax credit ....
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....ers including fuel, repairs and maintenance of the buses without any right to collect fares, fines or penalties from the passengers that will be collected by the DoT direct and the entire revenue will be collected in their name. 2.3 The DoT shall pay the applicant service charge on a "Gross Cost Model" basis that is discussed in the agreement dated 28.09.2019 The Applicant has been advised its services shall be covered under Notifications issued from time to time and will be subjected to a GST rate. DOCETax DAAR 2.4 The fare for the said buses is being collected by the Department of Transport from the passengers. It is relevant to mention here that the service of 'renting of motor vehicles to carry passengers' by the Applicant to the Department of Transport is covered within the definition of 'supply' as defined in Section 7 of the Central Goods and Services Tax Act, 2017 (hereinafter for the sake of brevity referred to as "CGST Act"). Accordingly, the Applicant was liable to pay GST on the same. The said service of "renting of motor vehicles to carry passengers" is a "service" as per Entry No.5(f) of Schedule II of the CGST Act, 2017. 2.5 That the A....
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....ore attracted CGST and SGST @ 9% each on remuneration received for such services rendered by the applicant." 2.10 The services provided by the Applicant shall be covered under Entry 10(i) of the Rate Notification which reads as follows: "Renting of any motor vehicle designed to carry passengers where the cost of fuel, repair and maintenance is included in the consideration charged from the service recipient". Under Entry 10(i) of the Rate Notification, the tax is payable at the rate of 12%. However, the supplier has an option to pay tax at the rate of 5% provided it does not avail the input tax credit of tax paid on input supplies used for providing the services. If the supplier does not exercise the option of 5%, it shall be liable to pay tax at the rate of 12% with eligibility to avail the input tax credit. The condition for service to fall under Entry 10(i) is that the cost of fuel is included in the consideration charged from the service recipient. In the present case, the buses to be given on hire to DOT shall run on fuel including the drivers. As these buses run on petrol/diesel, which is the case in the Air- conditioned Operated buses. The consideration charged by the App....
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....T dated 06/10/2021, Entry 8 has been clarified that - "Renting of vehicles to State Transport Undertakings and Local Authorities 8.1 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". 8.2 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 (Rate) 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. 8.3 It is relevant to note in this context that Schedule II of CGST Act. 2017 declares supply ....
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....ts previous order of taxing the applicant at 12% GST with availment of ITC to the exempted supply by virtue of Clarification given under Circular No. 164/20/2021-GST. 2.18 Based on the aforesaid submissions and judicial precedents, it may be concluded that transaction between the Applicant and DoT is in the nature of "renting of motor vehicle" and "not of hiring". As a consequence, the same shall be exempt in terms of Serial No. 22 mentioned above. 3. CONTENTION - AS PER THE REVENUE OFFICER: 3.1 The jurisdictional/concerned officer submitted that the nature of the transaction between the applicant and DoT is of the nature of leasing/renting supply. The item under serial no 10(i) of notification no 11/2017-central tax (Rate) dated 28.06.2017 reads as renting of motor cab where the cost of fuel is included in the consideration. *Dictionary meaning of motor cab is any motor vehicle constructed, adopted or used to carry not more than 10 passengers excluding the driver, for hire reward. As such supply being made by the applicant is not covered under entry no 10(i) of notification no 11/2017-central tax (Rate) dated 28.06.2017. 3.2 Given the above it appears that's se....
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....t, 2017 declares supply of any goods without transfer of title as supply of service even if right to use is transferred. Transfer of right to use has been declared as a supply of service [Schedule Il, Entry 5(f) refers]. 8.4 The issue was placed before the 45th GST Council Meeting held on 17.09.2021. As recommended by the GST Council, it is clarified that the expression "giving on hire" in SI. No. 22 of the Notification No. 12/2017-CT (Rate) includes renting of vehicles. Accordingly. services where the said vehicles are rented or given on hire to State Transport Undertakings or Local Authorities are eligible for the said exemption irrespective of whether such vehicles are run on routes, timings as decided by the State Transport Undertakings or Local Authorities and under effective control of State Transport Undertakings or Local Authorities which determines the rules of operation or plying of vehicles." 3.7. However, in this case (as per SCN dated 23.07.2024) the services being provided by the Concessioners (the applicant) to the DoT in terms of Concession agreement is actually the Stage carriage service by Air condition buses and not the Renting of transport vehicle and acco....
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....and as per Entry 8(ii)(b) of Notification No.11/2017-CT (Rate) attracted GST @ 5% provided that credit of input tax charged in respect of goods used in supplying the service under SAC is not utilized for paying Central Tax or Integrated Tax on the supply of the service. 3.9 It further appeared that it was the Concessionaires who are providing Stage Carriage Service (AC Buses) to DoT and not the DoT (who discharged GST only on the ticket collection value). Therefore, the Concessionaires are liable to pay appropriate GST (i.e. @ 5% without availing the ITC), on whole of the consideration received from DoT under the Concession Agreement. Therefore, the CGST amounting to Rs. 11,60,38,738/- (2.5% of gross value) and SGST 6. amount to Rs. 11,60,38,738/- (2.5% of gross value) payable on a value of Rs. 464,15,49,503/- against the Services of "Transport of Passengers by Air-conditioned Bus Stage Carriage" provided by the taxpayer to DoT during the period from FY 2019-20 to 2023-24 were ordered to recover under Section 74(1) of the CGST Act, 2017 along with interest payable thereon under Section 50 of the CGST Act, 2017 and Input Tax Credit taken on goods and services used in supplying th....
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....n was pending for ruling. DI Trade Da DAAR (b). The applicant, during the pendency of the application, filed Writ Petition before the Hon'ble High Court of Delhi vide W.P. No. 14364/2022 on 29.09.2022. The Hon'ble High Court vide its Order dated 11.10.2022 in para 7 held that: . "7. In these circumstances, we are of the view that the writ petition can be disposed of. with the following directions: . (i) If the Authority is constituted within the next two weeks, the said Authority will take up the application filed by the petitioner and render its opinion, qua the same. . (ii) In case the Authority is not constituted within the next two weeks, respondent no.2 will issue a clarification, as to the rate at which it could have collected and thus included it in its invoices, having regard to the fact that it is the petitioner's assertion that it has availed input tax credit." (c). The applicant further filed Contempt petition before Hon'ble High Court of Delhi vide case no. CONT.CAS(C)-346/2024 dated 27.02.2024 due to non-compliance of the above-said order dated 11.10.2022. (d). After that the Delhi Authority for Advance Ruling was reconstitut....
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....ion 98(2) of the Act, the Advance Authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provision of the Act. For case of reference, the relevant statutory provisions of the 98(2) of the Act reads as follows: 98(2) of CGST Act, 2017 which is reproduced below: (2) The Authority may, after examining the application and the records called for and after hearing the applicant or his authorised representative and the concerned officer or his authorised representative, by order, either admit or reject the application: Provided that the Authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act: Provided further that no application shall be rejected under this sub-section unless an opportunity of hearing has been given to the applicant: Provided also that where the application is rejected, the reasons for such rejection shall be specified in the order. 5.3. Chapter XVII - Advance Ruling is a benevolent pi....