SGST Advance Ruling Authority

GST – Tamil Nadu AAR - Section 15 of the CGST Act – Rule 33 of the CGST Rules - Valuation - Applicant is a Non-Banking financial company is involved in the business of leasing of machinery, commercial vehicles and non-commercial vehicles - Whether the certain additional services viz., payment of road tax, registration fees, insurance premium, etc., rendered by the applicant in the course of its Leasing of the vehicles to the Lessee falls under the category of “services of a pure agent” - Whether the recovery of Motor Vehicle Registration fee, Motor Vehicle life Tax & RTO charges etc., by the applicant from the lessee for the registration of the vehicle in the name of the lessee forms part of the value of supply or the applicant is acting as a pure agent for this purpose and therefore, said charges do not form part of the taxable supply – HELD – the applicant extends the services of ‘Operating Lease’ to the Lessee - the vehicle is given on ‘Operating lease’, wherein the ownership of the vehicle is held by the applicant and through the terms and conditions for the leasing transactions, the applicant has permitted the lessee to register the vehicle in the name of the lessee - The fact that the vehicle is allowed to be registered in the name of the lessee does not alter the other fact that the applicant is the owner of the vehicle and the lessee is a mere bailee of the goods on account of the applicant - Making payment of registration fees, Road Tax, RTO charges and Insurance Premium is the responsibility of the applicant and not lessee as the vehicle is owned by the applicant and not the lessee – although the applicant is not paying these charges on behalf of the lessee but the charges are paid to make the vehicle usable on road following the provisions of Motor Vehicle Act and related statutory provisions etc. before leasing such vehicles to the lessee for operations - the applicant has failed to establish themselves acting as a ‘pure agent’ - the ‘On-road Components’ having the nature of incidental expenses in relation to leasing of vehicles cannot be considered as procured in the capacity of ‘Pure Agent’ by the applicant and are includible in the value of supply, to be considered as Transaction Value for the purpose of valuation and taxable @ 28% along with applicable cess

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