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Applicant would be eligible to input tax credit on the Rent bill issued by the service provider who provides them with buses on rent charging GST@ 18% subject to fulfillment of the conditions as stipulated under section 16 read with section 17 of the CGST Act, 2017.

Input tax credit— The applicant is engaged in the service of transportation of passengers by air conditioner Buses (i.e. Bus operator) which falls under the SAC code 9964. The applicant charge consideration from passengers which is inclusive of fuel cost and accordingly paying GST @ 5%. They have taken such Buses on rent from another service provider. Such service provider issued them bill of rent for such buses along with GST 18% and GST is separately mentioned in his rent bill.

The applicant seeks advance ruling regarding the availability of input tax credit of GST@ 18% (i.e. CGST 9% and SGST 9%) on the Rent bill issued by the service provider who has given him Buses on rent?

The applicant is of the opinion that Sr. .No. 8 (vi) of Notification No. 11/2017-CT (Rate) Dated 28.06.2017 does not restrict “credit of input tax charged on services by another service provider for transporting passengers in a motor vehicle or renting of a motor vehicle”.

The applicant would be eligible to input tax credit on the input services provided they fulfill the conditions as stipulated under section 16 read with section 17 of the CGST Act, 2017, whereas eligibility or otherwise of the tax rate as provided under sr. no. 8(vi) of Notification no. 11/2017-CT(Rate) dated 28.6.2007, as amended vide Notification No. 31/2017-C.T. (Rate), dated 18-10-2017 read with Explanation no. (iv) therein is subject to the pre-condition that Input tax credit of input tax charged on goods and services used in supplying the service, other than the input tax credit of input service in the same line of business (i.e. service procured from another service provider of transporting passengers in a motor vehicle or renting of a motor vehicle), has not been taken.

Held that— Applicant would be eligible to input tax credit on the Rent bill issued by the service provider who provides them with buses on rent charging GST@ 18% (i.e. CGST 9% and SGST 9%), subject to fulfillment of the conditions as stipulated under section 16 read with section 17 of the CGST Act, 2017.

Applicability of the tax rate for Transport of passengers by any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charged from the service recipient as provided under sr. no. 8(vi) of Notification no. 11/2017-CT(Rate) dated 28.6.2007 as amended vide Notification No. 31/2017-C.T. (Rate), dated 13-10-2017 read with Explanation no. (iv) therein, to the applicant is subject to the condition that Input tax credit charged on goods and services used in supplying the service, other than the input tax credit of input service in the same line of business (i.e. service procured from another service provider of transporting passengers in a motor vehicle or renting of a motor vehicle), has not been taken.