2023 (5) TMI 71 - AAR - GST

Classification of supply - Motor vehicles - supply of Ambulances (Mobile Common Service Centers) for providing health services - supply of goods or services or both - rate of GST - determination of liability to pay tax on goods or services or both - admissibility of input tax credit on purchase of vehicles and other components - HELD THAT - The scope of supply of Motor vehicles includes sale, transfer, barter, exchange, renting, disposal or leasing of such vehicles. The applicant is involved in supply of Motor vehicles in the form of Ambulances (Mobile Common Service Centers) to Government of Tripura. Therefore the applicant is in the business of further supply of Motor vehicles which he purchases - As per Section 17(5)(a) of CGST/TGST Act 2017 the ITC on purchase of such vehicles which are meant for further supply of such motor vehicles is not a blocked credit as the definition of supply includes sale, transfer, barter, exchange, renting, disposal or leasing of such vehicles. The transaction of supply of ambulances to government of Tripura is an interstate supply which attracts tax under IGST head. The rate of tax applicable to the commodity under HSN 8703 is 28% for all transactions after 30.09.2021. It is very clear that this transaction does not fit to the description of vehicle under the tariff heading 8702 as the vehicle, supplied by applicant to government of Tripura, is a seven seater and is meant to transport less than ten or more persons, including the driver, as stated by the applicant. Further they are eligible for taking input tax credit on the tax charged on any supply of goods or services which are used or intended to be used in the course of furtherance of this business provided the applicant fulfils the conditions for availment of ITC as detailed in provisions of Section 16 of CGST/TGST Act 2017 - The applicant shall utilize the input tax credit in the electronic credit ledger as prescribed under Section 49 of the CGST Act, 2017 read with Rule 88A of the CGST Rules pertaining to order of utilization of input tax credit.

Summary

Issues involved:
The case involves seeking clarification on the rate of GST for the supply of goods or services, determining the liability to pay tax on goods or services, and the admissibility of Input Tax Credit on the purchase of vehicles.

Rate of GST for supply of goods or services:
The applicant intends to supply modified vehicles to the government of Tripura, making it an interstate supply attracting IGST. The applicable tax rate for the commodity under HSN 8703 is 28%.

Liability to pay tax on goods or services:
For an interstate supply, the liability to pay tax arises under the IGST head. The tax liability on goods is determined at the time of supply as per the provisions of section 12 of CGST/TGST Act, and for services, as per section 13. The value of the supply is the transaction value paid to the government of Tripura as stated in FORM GST ARA-01.

Admissibility of Input Tax Credit on purchase of vehicles:
The applicant can claim Input Tax Credit on the purchase of vehicles meant to be modified into ambulances for further supplies to the government of Tripura. This credit is admissible if the conditions for availing ITC under Section 16 of CGST/TGST Act are met. As per Section 17(5)(a) of the Act, the ITC on such vehicles is not blocked as the definition of 'supply' includes various forms of transactions involving such vehicles.