2024-VIL-169-AAR
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SGST Advance Ruling Authority

GST – Kerala AAR - Classification and applicable rate of GST on car rental service - Whether the car rental service rendered by the applicant falls under SAC 9966 or under SAC 9973 – HELD - The service offered by the applicant is supply of vehicles without operator. After the amendment introduced vide Notification No 20/2019 Central Tax (Rate) dated 30-09-2019, the SAC 9966 includes only rental service of transport vehicle ‘with operator’ and thus now the SAC 9966 does not cover the service rendered by the applicant, which is rental without operator. Hence, the appropriate SAC for the service rendered by the applicant is 9973 – Ordered accordingly - Applicable rate of GST on car rental service - Transfer of right of goods - Whether the rate provided in notification no 11/2017 Central Tax Rate dated 28.6.2017 as amended vide notification No 20/2019 Central Tax (Rate) under the Sl no 17 (viii) is applicable for the services rendered by the Applicant – HELD - the five tests laid down in BSNL case are not satisfied in the present case. Transfer of right of goods requires transfer of effective control over such goods, which is not present in this case and therefore it cannot be said to be a transfer of the right to use the vehicle - the contracts in question do not tantamount to transfer of right to use. Accordingly, the service is leasing or rental services, without operator, which falls under Sl. No. 17 (viii) of Notification No 11/2017 Central Tax (Rate) dated 28-06-2017. Such services attract GST at the rate of 18% GST.
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