2026-VIL-182-AAR
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SGST Advance Ruling Authority

GST – Maharashtra AAR - Classification of long-term leasing of electric vehicles without operator - Financial leasing services under heading 9971 or leasing or rental services without operator under heading 9973 - Applicant, engaged in leasing electric vehicles, entered into a Vehicle Lease Agreement with a lessee for leasing e-bikes without operator for a period of forty eight months - The lessee uses the vehicles for renting out to its customers, bears maintenance, repairs, insurance and statutory compliance and has an option to purchase the vehicles on expiry of the lease - Whether leasing of electric vehicles without operator is classifiable under heading 9973-Leasing or rental services without operator under Sl. No. 17 of Notification No. 11/2017-CT (Rate) - HELD - The arrangement between the Applicant and the lessee does not merely involve short-term rental of vehicles. Instead, the agreement creates a structured leasing arrangement extending over a substantial period of forty-eight months, during which the lessee utilizes the vehicles for its commercial operations. Further, the lessee assumes substantial responsibilities relating to operation of the vehicles. Such features indicate that the arrangement goes beyond mere rental of goods. Therefore, the present transaction does not fit squarely within the typical scope of Heading 9973 – The arrangement is in substance a finance lease where the lessor finances the acquisition of equipment and recovers the cost through lease rentals. If the agreement is Financial Lease agreement, then it would be squarely falls under Heading 9971 - Financial and related services Sl. No. 15(ii)- Financial leasing services including equipment leasing and hire purchase of Notification No. 11/2017-CT (Rate) dated 28.06.2017 and the applicable rate of tax shall be the same rate of tax as applicable on supply of like goods involving transfer of title in goods – The leasing of Electric Vehicles (E-Bikes/EVs) without operator by the Applicant is classifiable under SAC 9971 - Financial and related services and covered under Sl. No. 15(ii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 20/2019-Central Tax (Rate) dated 30.09.2019 and the applicable rate of tax will be the same rate as applicable on supply of like goods involving transfer of title in goods – Ordered accordingly
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