Question 19

XYZ (Maharashtra) has taken an equipment on Rent from PQR (Andhra Pradesh). On the instructions of XYZ, the equipment was directly delivered to ABC (Andhra Pradesh) since in turn it was given on rent by XYZ to ABC. 1) PQR has to charge to XYZ, IGST or CGST & SGST? 2) XYZ has to charge to ABC, IGST or CGST & SGST?

Answer:

Classification of transaction as Intra-state or Inter state depends on Location of Supplier and Place of Supply. 
 
1. In the first part of transaction of renting of movable equipment, Location of  supplier is Andhra Pradesh (PQR place )and Place of supply according to section 12(2) of IGST Act is Location of recipient of service is  Maharashtra (Place of XYZ).
Thus PQR has to charge IGST.
 
2. In the second part of transaction of renting of movable equipment, Location of supplier i.e. Maharashtra (Place of XYZ) and Place of supply according to section 12(2) of IGST Act is Location of recipient of service is Andhra Pradesh (ABC place)
Thus XYZ has to charge IGST. (REPLY dt. 3/2/2018)