Ishan Resins & Paints Ltd
The Applicant intends to lease out vehicles like trucks, tankers etc. designed to transport goods. The control and possession of the vehicle will be transferred to the lessee, who will engage operator and bear the cost of repair, insurance etc.
Thus, it is not classifiable under SAC 9966, which is restricted to rental services of transport vehicles with operator. The service is classifiable under SAC 997311 as leasing or rental services concerning transport equipment without operator. It amounts to the transfer of the right to use the goods and taxable under Serial No. 17(iii) of the Notification no 12/2017 CT(Rate) dated 28/06/2017.
AAR ruled out that Section 17(5)(a) of the GST Act does not allow input tax credit on inward supply of motor vehicles of a specific category (those meant for transportation of persons having seating capacity not exceeding 13 persons). The restriction does not apply to the goods transport vehicles. Serial No. 17(iii) of the Rate Notification does not prohibit claiming input tax credit on the goods given on lease.
The details of the case can be read here :Case file