SIGN IN SUBSCRIBE

News Update

Cus - Export of non-basmati rice - Notification 20/2023 insofar as it denies the benefit of the transitional arrangement as contained in para-1.05 of the FTP 2023, is bad in law: HCCus - Refund of SAD - 102/2007-Cus - Areca Nut and Supari are one and the same - Objections with regard to name, nature and status of importer or buyers or the end use of goods purchased by them etc. are extraneous: HCCX - Interest on Refund - Since wrong order annexed by petitioner in paper book, Bench is unable to proceed further - Petition is dismissed with liberty to file a fresh one: HCGST - No E-way bill - When petitioner imports machinery and after Customs clearance, transports same to his own factory, it cannot be said that such a transportation would fall within the definition of term 'supply' - Penalty imposable under second limb of s.129(1)(a): HCGST - Fix responsibility on officers who allowed BG to lapse - Petitioner not justified in not renewing BG - Cost of Rs.15 lacs imposed, to be paid to PM Cares Fund: HCGST - Since the parties agree that petition can be disposed of on the basis of records available before Appellate Authority, petitioner is directed to enclose all documents filed before Appellate Authority in a compilation, in form of a paper book: HCWrong RoadST - Whether any service is used for personal consumption or not is certainly question of fact and being question of fact, no substantial question of law arises: HCGovt proposes to amend Geographical Indication of Goods Rules; Draft issued for feedbackST - If what has been paid as tax is without authority of law, Revenue should refund the same - Denial of credit would result in the whole exercise being tax neutral: HCWarehousing Authority notifies several agri goods to be stored in only registered warehousesST - Even if the petitioner may have a case on merits, it is best left to be decided by the Appellate Authority under the hierarchy prescribed under the FA, 1994: HCUS FDA okays Eli Lilly Alzheimer’s drugGST - Petitioner challenges jurisdiction of assessing officer - Petitioner is entitled to file an appeal u/s 107 by availing an alternate efficacious remedy: HCFive from Telangana killed in car accident on Pune-Solapur HighwayGST - Existence of an alternative remedy is a material consideration but not a bar to the exercise of jurisdiction: HCHush money case against Donald Trump - Sentencing deferred to Sept 18GST - It is open to a trader to take goods by whichever route he opts, unless the law otherwise requires, destination point being intact: HCDeadly hurricane Beryl smashes properties in JamaicaGST - Conclusion that taxable person is providing a service to supplier while taking the benefit of a discount by facilitating an increase in the volume of sales of such supplier is ex facie erroneous and contrary to the fundamental tenets of GST law: HCIsrael claims 900 militants killed in Rafah since May monthGST - Order expressly records that personal hearing notice was returned with endorsement 'no such person at address' - Since petitioner has shifted to a new premises, it is just and necessary to provide an opportunity to contest demand: HC116 die in stampede at UP ’Satsang’I-T- Application for revision of order dismissed in limine on grounds of delay; case remanded for re-consideration: HCWe are deepening economic ties with India, says US officialI-T- As per Section 119(2)(b), power to condone applications relate to claims for amount exceeding Rs 50 lakhs are to be considered by CBDT; however it is impermissible for CBDT to pass order on merits: HC8 Dutch engineers build world’s longest bicycle - 180 feet, 11 inchesI-T- Additions framed u/s 68 for unexplained income & u/s 69 for unexplained expenditure not tenable where complete transactional details are furnished & not doubted: HCRailways earns Rs 14798 Crore from Freight loading in June monthI-T- Delay in filing ITR is per se insufficient reason to estimate assessee's profit @15% on turnover, more so where audited financial report is filed in timely manner: ITATMoD inks MoU to set up testing facilities in Unmanned Aerial System in TN Defence Industrial CorridorI-T- For invoking section 69A, assessee should be found to be owner of any money, bullion, jewellery or other valuable article & which is not recorded in the books of account: ITATGovt proposes Guidelines for ethical approach to Coal MiningI-T- TDS credit can be allowed based on AIS, where details pertaining to TDS, advance tax & other payments are reflected in Form 26AS: ITATVaishnaw to inaugurate Global IndiaAI Summit 2024I-T- Lending money with the primary intention of earning interest can be considered a business activity, but nature and manner of lending, as well as the frequency, should be taken into account: ITAT
 
Treading GST Path - XXXVI - GST on travels business

OCTOBER 24, 2017


By G Natarajan, Advocate, Swamy Associates

THE following basic facts have to be kept in mind.

- The business is carried out by the service provider, who may not own the vehicle, but would rent / hire the vehicles from vehicle owners.

- Two types of services are recognised under GST law (also under the erstwhile Service Tax law) viz., (i) Renting the vehicle to companies for staff transportation, renting to individuals / groups for tour, picnic, etc.; and (ii) Passenger transportation services where the fare is collected directly from the passengers.

I. Rental Services:

A. Renting of "motor cab" by a Travel Agency from Vehicle owners.

"Motor cab" means vehicles upto 6 passenger capacity as per the definition under the Motor Vehicles Act.

If the vehicle owners are registered, they have to pay GST and if they are not registered, GST has to be paid by the Travel Agency (registered) who are taking the vehicles from such unregistered owners. This reverse charge is not applicable for all payments made on or after 13.10.2017 to 31.03.2018 (Notification 38/2017 CT (Rate) Dt. 13.10.2017).

Rate of GST 5 % as per S.No. 10 of Notification 11/2017 CT (Rate) Dt. 28.06.2017. The consideration should include the cost of fuel also. If GST is paid by the vehicle owner, he cannot avail any ITC for his inputs, input services and capital goods.

B. Renting of other vehicles by Travel Agency from vehicle owners.

If the vehicle owners are registered, they have to pay GST and if they are not registered, GST has to be paid by the Travel Agency (registered) who are taking the vehicles from such unregistered owners. This reverse charge is not applicable for all payments made on or after 13.10.2017 to 31.03.2018 (Notification 38/2017 CT (Rate) Dt. 13.10.2017).

Rate of GST 18 % as per S.No. 10 of Notification 11/2017 CT (Rate) Dt. 28.06.2017 upto 12.10.2017.

With effect from 13.10.2017.

5 % GST – if the cost of the fuel is also included in the consideration. If the vehicle owners are not registered, there is no need to pay under RCM as RCM has been suspended till 31.03.2018.

If the cost of fuel is not included in consideration, then the GST rate would be 12 %.

The above changes are made vide Notification 31/2017 CT (Rate) Dt. 13.10.2017.

C. Renting of "motor cab" by Travel Agency to customers.

Motor cab means vehicles upto 6 passenger capacity.

Rate of GST 5 % as per S.No. 10 of Notification 11/2017 CT (Rate) Dt. 28.06.2017. The consideration should include the cost of fuel also. No ITC can be claimed. Even the GST paid on renting of vehicles from vehicle owners also cannot be claimed.

If any ITC is availed, the rate of tax is 18 %.

The above position is from 01.07.2017 to 21.08.2017.

With effect from 22.08.2017, Rate of GST 5 % as per S.No. 10 of Notification 11/2017 CT (Rate) Dt. 28.06.2017. The consideration should include the cost of fuel also. NO ITC can be claimed.

If ITC is availed, the rate of tax is reduced (vis-à-vis that which was applicable earlier) to 12 %. (Vide Notification 20/2017 CT (Rate) Dt. 22.08.2017) The above position continued upto 12.10.2017.

With effect from 13.10.2017, the distinction between motor cab and other vehicles has been removed. Renting of all motor vehicles would attract the following rates, subject to following conditions.

5 % GST – if the cost of the fuel is also included in the consideration and no ITC other than ITC in respect of vehicles rented from vehicle owners are availed. In other words, ITC in respect of the GST paid by vehicle owners (if they are registered) to Travel Agencies, can be availed by the Travel Agency. If the vehicle owners are not registered, there is no need to pay under RCM as RCM has been suspended till 31.03.2018.

If the above conditions are not satisfied (i.e. if all other ITC is availed, or if cost of fuel is separately borne), then the GST rate would be 12 %.

The above changes are made vide Notification 31/2017 CT (Rate) Dt. 13.10.2017.

D. Rental services of other vehicles other than Motor cab by Travel Agency to customers.

Rate of GST is 18 % from 01.07.2017 to 12.10.2017.

With effect from 13.10.2017 - 5 % GST – if the cost of the fuel is also included in the consideration and no ITC other than ITC in respect of vehicles rented from vehicle owners are availed. In other words, ITC in respect of the GST paid by vehicle owners (if they are registered) to Travel Agencies, can be availed by the Travel Agency. If the vehicle owners are not registered, there is no need to pay under RCM as RCM has been suspended till 31.03.2018.

If the above conditions are not satisfied (i.e. if all other ITC is availed, or if cost of fuel is separately borne), then the GST rate would be 12 %.

The above changes are made vide Notification 31/2017 CT (Rate) Dt. 13.10.2017.

To tabulate,

S.No.

Situation

01.07.2017 to 21.08.2017

22.08.2017 to 12.10.2017

From 13.10.2017

1

Hiring "motor cab" from owners by travel agency, where the owner is registered

5% No ITC. Value to include fuel cost also. If ITC availed 18 %

5% No ITC. Value to include fuel cost also. If ITC availed 12 %.

5% No ITC (ITC can be availed if he is also hiring the vehicle from another person who pays GST).

Value to include fuel cost also.

2

Hiring "motor cab" from owners by travel agency, where the owner is not registered

5 % to be paid by the travel agency under RCM

5 % to be paid by the travel agency under RCM

No RCM liability

3

Hiring of other vehicles from owners by travel agency, where the owner is registered

18%

18%

12%

4

Hiring of other vehicles from owners by travel agency, where the owner is not registered

18% to be paid under RCM

18% To be paid under RCM

No RCM

5

Hiring of motor cab to customers

5 % if no ITC availed and cost of fuel is also included in value

5 % if no ITC availed and cost of fuel is also included in value

5 %. ITC of GST paid on hiring of vehicles for subsequent hiring alone can be availed

   
18 % otherwise
12 % otherwise
12 % otherwise

6

Hiring of all other vehicles to customers

18 %

18 %

12 %

II. Services provided directly to passengers, viz., Transport of Passengers.

Transport of passengers by air conditioned contract carriage (other than motor cab), air conditioned stage carriage and radio taxi – 5 % GST as per S.No.8 (ii) of Notification 11/2017 CT (Rate) Dt. 28.06.2017. No ITC can be taken.

Transport of passengers by motor cab – 5 % GST as per S.No. 8 (vi) of Notification 11/2017 CT (Rate) Dt. 28.06.2017. Cost of fuel also to be included in consideration. NO ITC can be taken.

If the above conditions are not satisfied, rate of GST is 18 % as per S.No. 8 (vii) of Notification 11/2017 CT (Rate) Dt. 28.06.2017.

With effect from 22.08.2017, the following amendment has been made vide Notification 20/2017 CT (Rate) Dt. 22.08.2017 .

Transport of passengers by motor cab – 5 % GST as per S.No. 8 (vi) of Notification 11/2017 CT (Rate) Dt. 28.06.2017. Cost of fuel also to be included in consideration. NO ITC can be taken.

If the above conditions are not satisfied, rate of GST is reduced to 12 % as per S.No. 8 (vi) of Notification 11/2017 CT (Rate) Dt. 28.06.2017.

Amendments from 13.10.2017.

Transport of passengers by any motor vehicle, the rate of GST is 5 % if no ITC other than ITC of renting of the vehicles from outside, for this purpose, is availed. If any other ITC is availed, the rate of GST is 12 %.

The above amendments are made vide Notification 31/2017 CT (Rate) Dt. 13.10.2017.

(The views expressed are strictly personal.)

(DISCLAIMER : The views expressed are strictly of the author and Taxindiaonline.com doesn't necessarily subscribe to the same. Taxindiaonline.com Pvt. Ltd. is not responsible or liable for any loss or damage caused to anyone due to any interpretation, error, omission in the articles being hosted on the site)

POST YOUR COMMENTS
   

TIOL Tube Latest

TIOL Tube
India's Path to Becoming a Superpower: An Interview with Pratap Singh

TOP NEWS


AR not Afar by SK Rahman

VISION 360



Shri Ram Nath Kovind, Hon'ble 14th President of India, addressing the gathering at TIOL Special Awards event.

TII LATEST

TIOLCORPLAWS LATEST