18% GST on Service of Hiring of Fitted Assets such as A/C, Fire Sprinkler, DG Sets and Electric Installations: AAR [Read Order]
The AAR ruled that the supply of services concerning the Applicant constitutes leasing or rental services
![18% GST on Service of Hiring of Fitted Assets such as A/C, Fire Sprinkler, DG Sets and Electric Installations: AAR [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/03/GST-on-Service-Service-of-Hiring-Fitted-Assets-Fire-Sprinkler-DG-Sets-and-Electric-Installations-DG-Sets-Electric-Installation-AAR-taxscan.jpg "18% GST on Service of Hiring of Fitted Assets such as A/C, Fire Sprinkler, DG Sets and Electric Installations: AAR [Read Order]")
In a recent ruling, the West Bengal Authority for Advance Ruling (AAR) held that the hiring of fitted assets, including air-conditioning systems, fire sprinklers, Diesel Generator (DG) sets, and electric installations, is classified as leasing or rental services and is subject to a Goods and Services Tax (GST) of 18%. The ruling was made by the AAR against an application filed by TCG...
In a recent ruling, the West Bengal Authority for Advance Ruling (AAR) held that the hiring of fitted assets, including air-conditioning systems, fire sprinklers, Diesel Generator (DG) sets, and electric installations, is classified as leasing or rental services and is subject to a Goods and Services Tax (GST) of 18%.
The ruling was made by the AAR against an application filed by TCG Urban Infrastructure Holdings Private Limited, a real estate development company engaged in leasing commercial properties and providing fitted assets on hire to tenants at properties held by Bengal Intelligent Parks Private Limited (BIPPL) and BIP Developers Private Limited (BIPDPL), subsidiaries of the applicant in India and providing related consultancy services.
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The Applicant, represented by Chartered Accountants (CA) Priyajit Ghosh, Vikash Agarwal, and Yamini Agarwal sought an advance ruling to understand the classification of services for hiring of fitted assets and the applicable GST rate.
TCG Urban Infrastructure had been charging 28% GST under SAC 997314 but queried whether the services shall instead be taxed at 18% under SAC 997314 as ‘leasing or rental services concerning office machinery and equipment’ or classified as ‘support services’ under SAC 998599.
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Reference was made to a prior AAR decision in a matter instituted by Sun Knowledge Private Limited, a client of the Applicant raising concerns about 28% GST on “Hire of Assets”. The AAR had ruled that each of the supplies there would attract GST of 18% under serial number 17(iii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.
The two-member bench comprising Tanisha Dutta, Joint Commissioner, CGST & CX, and Joyjit Banik, Additional Commissioner, SGST examined the applicant’s business model and observed that the Applicant provides tenants with pre-installed infrastructure such as electrical wiring, heating, ventilation, and air conditioning (HVAC) systems, sprinkler fire-fighting systems, and backup DG sets and charges a monthly hire fee on the same.
The Bench ruled that the supply of hiring services of air-conditioning systems, fire sprinklers, DG sets, and electric installations falls under "leasing or rental services, without operator," which is explicitly covered under Serial No. 17(viii) of Notification No. 11/2017-Central Tax (Rate) with each of the supplies attracting 18% GST.
To Read the full text of the Order CLICK HERE
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