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Karnataka AAR classifies renting of e-bikes and bicycles under SAC 9966.

Case: Yulu Bikes Pvt. Ltd.

Forum: Karnataka AAR

Facts

The Applicant is engaged in renting of vehicles like e-bikes and bicycles in Bengaluru, Karnataka through a technology driven mobility platform. The Applicant enters into contract/ agreement with the customers with regard to usage / renting of the e-bikes), bicycles and charge based on the of usage of such vehicles. The Applicant charges GST @ 18% in respect of the services. The Applicant sought an advanced ruling on whether renting of e-bikes and bicycles without operator can be classified under the SAC 9973 – Leasing or rental services without operator -Sl.No.17 (viia) of Notification No.11/2017 Central Tax (Rate).

Key points

The AAR in its findings held that sub headings of SAC 9973 pertain to other goods, IPR, etc with no mention of transport goods/vehicle. Thus the Applicant’s services are squarely covered under SAC 9966. The Applicant’s interpretation that post 30th Sept 2019, renting/leasing of all goods without operator should be falling under Heading 9973 is not correct and hence is not tenable under the law. Thus, the renting of e-bikes/ bicycles without operator cannot be classified under SAC 9973 – Leasing or rental services without operator and Sl.no.17(viia) of Notification no.11/ 2017 CT(R) dated 28th June 2017 as amended is not applicable to the Applicant

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