QUESTION

Please provide the breif tax implications under GST Act, if GTA providing services to another GTA (e.g. if GTA 1 providing vehicles (after hiring from the market) to GTA 2)

ANSWER

Facts of the case:  GTA providing services of providing vehicles (after hiring from the market) to another GTA.

Law applicable:
Notification No. 11/2017-Central Tax (Rate)

10. Heading 9966 (Rental services of transport vehicles with operators)

    

(i) Renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient.

2.5

Provided that credit of input tax charged on goods and services used in supplying the service, other than the input tax 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 Explanation no. (iv)]

or

6

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(ii) Time charter of vessels for transport of goods.





 

2.5

Provided that credit of input tax
charged on goods (other than on
ships, vessels including bulk
carriers and tankers) has not been
taken
[Please refer to Explanation no.
(iv)]. 

(iii) Rental services of transport vehicles with operators, other than (i) and (ii) above.]

    

Interpretation: Providing of vehicles is not a GTA service and is covered under the service of renting of motor vehicles. The rate of tax on such services is as mentioned above. 
 
Conclusion:  Tax implications shall be as provided in the table above subject to the specific condition (Reply dt.3/3/2020)