2026-VIL-94-AAR
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SGST Advance Ruling Authority

GST – Gujarat AAR - Classification of services and applicable GST rate for rental of electric buses - Applicant provide end-to-end operation and maintenance of electric buses, entered into an agreement with Surat Sitilink Limited (SSL) for supply, operation, and maintenance of electric buses in the city of Surat. The consideration was a fixed amount payable per kilometer of bus operation - Whether the rental services of electric buses provided by the applicant should be classified under entry (i) of Sl. No. 10 of Notification No. 11/2017-CT(R) dated 28.06.2017, which covers rental services of motor vehicles where the cost of fuel is included in the consideration charged – HELD - The rental services of electric buses provided by the applicant would not be covered under entry (i) of Sl. No. 10 of the notification, as electricity cannot be considered as "fuel" within the meaning of the term. The dictionary meanings of terms "fuel" and "electricity" are distinct, while electricity is a secondary energy carrier, fuel is a primary energy source containing chemical potential energy released through combustion. The legislature has distinguished between "motor vehicles" and "electrically operated vehicles" in other notifications, indicating the legislative intent to treat them as separate categories. Accordingly, the rental services of electric buses provided by the applicant would not be covered under entry (i) of Sl. No. 10 of Notification No. 11/2017-CT(R) - The rental services of electric buses provided by the applicant would be classified under entry (iii) of Sl. No. 10 of Notification No. 11/2017-CT(R) dated 28.06.2017 and would be taxable at the rate of 18% - Ordered accordingly - Whether the rental services of electric buses provided by the applicant should be classified under entry (iii) of Sl. No. 10 of Notification No. 11/2017-CT(R) dated 28.06.2017, which covers rental services of transport vehicles with operators, other than those covered under entries (i) and (ia) – HELD - The rental services of electric buses provided by the applicant would be covered under entry (iii) of Sl. No. 10 of the notification, as the services involve the rental of transport vehicles (electric buses) with operators, and the cost of "fuel" (i.e., electricity) is not included in the consideration charged. The legislature has used the specific term "electrically operated vehicle" in other notifications, indicating the legislative intent to treat them as a separate category from "motor vehicles" under the GST law. Accordingly, the rental services of electric buses provided by the applicant would be taxable at the rate of 18% under entry (iii) of Sl. No. 10 of the notification.
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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