The Tamil Nadu Authority of Advance Ruling (AAR) has held that goods and service tax  (GST) exemption is available on supply of goods carriage on hire or lease to a Goods Transport Agency (GTA) is a taxable supply.

The bench of B.Suseel Kumar and Balakrishna S. has observed that the supply of goods carriage on hire or lease to a Goods Transport Agency is a taxable supply. By virtue of Sl. No.22 of Notification No. 12/2017-CT (Rate) dated 28-06-2017, the activity is charged to Nil rate of tax.

(ii) Column 5 of the Table in the Notification is for conditions applicable for that specific entry. At SI. No. 22 of the Notification, no condition is specified for claiming the facility provided under the notification. The service provider, namely the applicant need not be a goods transport agency to claim the facility of the Notification. 

The Applicant is an unregistered entity who is planning to purchase a goods carriage and give it to rent/lease to a Goods Transportation Agency (GTA).

Being a service provider, they are doubtful whether their activity of supply would fall under taxable supply. They are seeking the applicability of GST on receipt of rent/lease income from renting of goods carriage to a Goods Transportation Agency.

The applicant sought the advance ruling on the issue whether goods carriage given on lease to the Goods transportation Agency(GTA) is a taxable supply?

CBIC clarified the applicability of GST on Renting of Vehicles to State Transport Undertakings and Local Authorities’, have clarified that “giving on hire” in Sl. No. 22 o f Notification No. 12/2017-C(Rate) includes ‘renting of vehicles’ and accordingly the services where vehicles rented or given on hire to State Transport Undertakings and Local Authorities, are eligible for exemption. Therefore, the term, ‘giving on hire’ specified in the notification includes ‘leasing and rental services’ also.

The AAR has held that the supply of goods carriage on hire or lease to a Goods Transport Agency is a taxable supply. By virtue of Sl. No.22 of Notification No. 12/2017-CT (Rate) dated 28-06-2017, the activity is charged to Nil rate of tax.

Ruling Details

Applicant’s Name: M/s. DHARMARAJU RAGUL

Ruling Date: 09.05.2025

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