2024 (1) TMI 564 - AAR - GST

Classification of service - rate of GST - Rental / Leasing Charges for Industrial Equipment s provided with operator - Classification under HSN Codes, 84151090, 84798920, 84145930, or not - HELD THAT - The supplies of rental / leasing services made by the applicant fall under sub entry (viia) of entry of sl no 17 of Notification 11/2017. Therefore the rate of tax for the service shall be same as applicable on supply of such goods which are For HSN Code 84151090 - CGST 14% SGST 14 %. For HSN Code 84798920 - CGST 6% SGST 6%. For HSN Code 84145930 - CGST 9% SGST 9%

Summary

Issues involved: Determination of applicable GST tax rate on rental/leasing charges for industrial equipment provided with an operator falling under specific HSN codes.

Summary:
The applicant, M/s. Ventair Engineers, sought clarification on the GST tax rate applicable to their rental/leasing services for industrial equipment under certain HSN codes. The company faced objections from customers and the Naval Dock Yard, Visakhapatnam, regarding the tax rate being charged, leading to a conflict and potential loss of business. The company's major activity involves the manufacture of machinery and equipment, specifically refrigerating or freezing equipment for industrial use.

Questions Raised:
The primary question raised was regarding the applicable GST tax rate on rental/leasing charges for industrial equipment under specific HSN codes: 84151090, 84798920, 84145930.

Discussion & Findings:
The Authority analyzed the relevant provisions and found that the rental/leasing services provided by the applicant fell under a specific sub-entry of the notification. The tax rates for the services were determined based on the applicable rates for the supply of similar goods. The HSN codes under consideration were examined to ascertain the correct tax rates applicable to each category of industrial equipment supplied by the applicant.

- For HSN Code 84151090, the tax rate was determined to be CGST 14% + SGST 14%.
- For HSN Code 84798920, the tax rate was set at CGST 6% + SGST 6%.
- For HSN Code 84145930, the tax rate was established as CGST 9% + SGST 9%.

Conclusion:
The Authority ruled that the applicable GST tax rates for the rental/leasing services provided by M/s. Ventair Engineers for industrial equipment under the specified HSN codes would be as detailed above, based on the provisions and analysis conducted.