12% GST on Service of Operating Mini AC Buses: AAR [Read Order]

GST - AAR Maharashtra - operating mini AC buses - AAR - Taxscan

The Maharashtra Authority of Advance Ruling (AAR) ruled that 12% GST on service of operating mini AC buses.

The applicant, M.P. Enterprises & Associates Limited is a ‘supplier’ GSTIN, under the provisions of the Central Goods and Services Tax Act, 2017. Brihanmumbai Electric Supply and Transport Undertaking (BEST) floated a Tender dated 24.08.2019, for the operation of stage carriage services for the public transport of 500 mini AC buses in Mumbai and its suburbs. The bid submitted by the applicant was accepted. The applicant entered into an agreement with BEST for the operation of stage carriage services for the public transport of AC minibusses.

The applicant sought the advanced ruling on the issue of whether the service of operating mini AC buses by the applicant for Brihan Mumbai Electricity Supply Transport Undertaking (BEST) would be exempt from payment of GST under Tariff Heading 9966 i.e. ‘services by way of giving on hire to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers’ in terms of Notification No.12/2017-CT(R) dated 28.06.2017 or not? Answered in the negative.

The applicant further sought clarification on whether the service of operating mini AC buses by the applicant for BEST would be subject to 12% GST under Tariff Heading 9966 i.e. renting of any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient’ inserted by way of Notification No.31/2017 dated 13.10.2017? (Amended Notification No.11/ 2017-CT(R) dated 28.06.2017) Answered in the affirmative. However 12% GST is chargeable only.

The applicant also asked that whether the service of operating mini AC buses by the applicant for BEST would be subject to GST @18% under Tariff Heading 9966 i.e. rental service of transport vehicles with or without operators’ under Notification No.11/2017-CT(R) dated 28.06.2017.

The coram of T.Ramnani and P.Vinitha Sekhar ruled that service of operating mini AC buses by the applicant for Brihan Mumbai Electricity Supply Transport Undertaking (BEST) would not be exempted from payment of GST under Tariff Heading 9966.

The AAR ruled that service of operating mini AC buses by the applicant for BEST would be subject to 12% GST under Tariff Heading 9966 with effect from October 13, 2017.

The Authority observed that service of operating mini AC buses by the applicant for BEST would be subject to 18% GST under Tariff Heading 9966 with effect from October 13, 2017.

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