GST Rates on services relating to Motor Vehicles

By GST Division (gst@vinodkothari.com)

 

The GST rates assigned for transaction in relation to motor vehicle is summarized in the below table:

SL no 1: When motor vehicle is made available to use by the recipient and the control and possession is retained by the owner, the service is covered under head 9964. The rate would be applicable as mentioned below:
Chapter, Section or Heading Description of Service  GST Rate (per cent.) Condition
Heading 9964

(Passenger transport services)

(i) Transport of passengers by motorcab where the cost of fuel is included in the consideration charged from the service recipient 5 Credit has not been Claimed
(ii) Transport of passengers by motorcab where the cost of fuel is included in the consideration charged from the service recipient 12 Credit has been claimed
(iii) Other Passenger transport services 18
Sl No.2: When motor vehicle is rented for a short period, in compliance with the rent a cab scheme of Motor Vehicle Act 1989, the transaction would be covered under heading 9966. The control and possession is in the hands of the recipient. The rate is mentioned below:
Heading 9966 (Rental services of transport vehicles) (i) Renting of motorcab where the cost of fuel is included in the consideration charged from the service recipient. 5 Credit has not been Claimed
(ii) Renting of motorcab where the cost of fuel is included in the consideration charged from the service recipient. 12 Credit has been claimed
(iii) Rental services of transport vehicles with or without operators, other than above 18
SL No 3: When the motor vehicle is leased for sufficiently longer period, it is treated equivalent to the sale of the asset, and the rate applied is same that is applied on the sale of motor vehicle s covered in heading 9971 below.
Heading 9971 (Financial and related services) (i) Transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration Same rate of tax as on supply of like goods involving transfer of title in goods
  (ii) Any transfer of right in goods or of undivided share in goods without the transfer of title thereof. Same rate of tax as on supply of like goods involving transfer of title in goods
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