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TMI Blog2024 (11) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... use the vehicle. The contracts in question do not tantamount to transfer of right to use. Accordingly, we find that the service is leasing or rental services, without operator, which falls under Sl. No. 17 (viii) of Notification No 11/2017 Central Tax (Rate) dated 28-06-2017. Such services attract GST at the rate of 18%. X X X X Extracts X X X X X X X X Extracts X X X X ..... verall control of the applicant through the track on device installed on the vehicle. Repairs required, if any, are carried out by the applicant. There is no transfer of right to use goods as the applicant is responsible to abide by all the laws relating to motor vehicles. The applicant is responsible for any damage to third parties, insurance etc. The applicant, however, reserves the right of reimbursement from the customer. Therefore, the applicant is providing leasing or rental service without operator and not leasing or rental of goods without operator. 5. Comments of the Jurisdictional Officer: The application was forwarded to the jurisdictional officer as per provisions of Section 98 (1) of the CGST Act. The Jurisdictional Officer reported that there are no pending or decided proceedings against the applicant under any provisions of the CGST Act 2017. 6. Personal Hearing: The applicant was granted opportunity for personal hearing on 21.06.2024 through Virtual Mode. Sri. Razee Moideen, FCA appeared on behalf of the applicant, and filed detailed statement of facts along with the application. He requested to issue the ruling on the basis of the submissions made by them in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , deferred payment or other valuable consideration;" is verbatim reproduced from clause (29A) (d) of Article 366 of the Constitution of India. The said clause of the Constitution has been extensively deliberated upon by the higher courts of this country, and the law on distinguishing a contract between sale of goods and supply of services is more or less settled. 7.6. This legal distinction has a bearing on the present matter, because, if the transaction falls within the purview of transfer of right to use goods, it follows that it is akin to a sale, attracting the same right as that of goods (under Sl. No. 17 (iii) of the notification). However, if there is no transaction involving transfer of goods, it falls under sl. No. 17 (viii) of the notification. 7.7. In one of the landmark rulings on the matter in BSNL v. Union of India [(2006) 3 SCC-1], the Apex court laid down the following five essential conditions required to constitute the transfer of the right to use the goods: a) There must be goods available for delivery. b) There must be a consensus ad idem as to the identity of the goods; c) The transferee should have a legal right to use the goods-consequently all legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , insurance etc of the cranes that he has lent, and therefore it is only a licence and not a transfer of right to use goods. 7.11. On the same lines, it is essential to examine the ingredients of the contract entered by the applicant with their clients to see whether only possession is transferred or whether substantial control remains with the applicant, in order to determine if the transaction before us is a licence or a transfer of right to use goods. 7.12. On a perusal of the agreement entered into with their users, we find that the cars are rented out for a period of three hours to one year. The cars are rented out based on online application and production of driving license and Adhar card. The insurance and service charges are paid by the applicant and the customer has no liabilities in this regard. There is 24 hours road assistance and replacement vehicles are provided at the request of the customer. For all practical purpose, the car is owned by the applicant and the driver has no liabilities other than payment of the required fee depending on the time of usage. Even while the car is in the possession of the customer, it is under full monitoring and control of the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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