Introduction
M/s. Raminfo Limited, a company located at 3-225 and 326, 4th Floor, Sterling Heights, Kavuri Hills, Guttalabegumpet village, Hyderabad, Telangana, has filed an application in FORM GST ARA-01 under Section 97(1) of TGST Act, 2017 read with Rule 104 of CGST/TGST Rules. The company seeks clarification on various provisions related to their business opportunity involving the supply of modified vehicles as ambulances.
Applicability of GST Acts
Before delving into the details of the case, it is important to note that the provisions of both the CGST Act and the TGST Act are similar, with a few exceptions. Therefore, references made to the CGST Act in this article will also apply to the corresponding provisions of the TGST Act.
Brief Facts of the Case
M/s. Raminfo Limited intends to undertake the supply of "Mobile Common Service Centres," commonly known as ambulances, to the State government department. To fulfill this business opportunity, they plan to purchase Maruti Suzuki EECO Vehicles (7 Seaters) and modify them to function as ambulances. The modified vehicles will be supplied to the end users/customers. The company has raised several questions regarding the classification of goods/services, GST rates, the applicability of notifications, determination of tax liability, and admissibility of Input Tax Credit (ITC) on vehicle purchases.
Questions Raised
The questions raised by M/s. Raminfo Limited in their application are as follows:
What is the rate of GST for the supply of goods or services?
How to determine the liability to pay tax on goods or services?
Whether the input tax credit on the purchase of vehicles and other components is admissible or not?
Personal Hearing
Representatives from M/s. Raminfo Limited, namely Tirupati Reddy, CA, and Satya Prakash, CA, attended the personal hearing. During the hearing, they reiterated the contentions presented in their application, emphasizing that their case is neither pending nor previously decided under any provisions of the GST Act.
Discussion & Findings
M/s. Raminfo Limited intends to purchase Maruti Suzuki EECO Vehicles, modify them into ambulances, and make interstate supplies to the government of Tripura. To determine the eligibility of ITC, it is essential to examine whether the vehicles fall under blocked credit as per Section 17(5) of the CGST/TGST Act, 2017.
According to Section 17(5)(a) of the Act, input tax credit is not available for motor vehicles used for transportation of persons with a seating capacity of not more than thirteen, except when they are used for specific taxable supplies like further supply of such motor vehicles, transportation of passengers, or imparting training on driving such vehicles.
Conclusion-
M/s. Raminfo Limited is involved in the further supply of modified vehicles, hence the ITC on the purchase of such vehicles is not a blocked credit and applicant will charge 28% GST as per Schedule IV of notification no. 01/2017-Central Tax (Rate).
Raminfo Limited-TELANGANA-AAR
TSAAR Order No. 02/2023
Date of order:03/04/2023
Comment: