Renting of e-bikes/bicycles without operator is classifiable under SAC 9973 - Leasing or rental services without operator and rate of tax as applicable under entry Sl.no.17(viia) of Notification no.11/2017 CT(R) dated 28th June 2017 as amended is applicable to the instant case.
Classification of service— The Appellant is engaged in renting of vehicles like e-bikes, bicycles in Bengaluru, Karnataka through a technology driven mobility platform. They enter into contract/agreement with the customers with regard to usage / renting of the e-bikes (Miracle), bicycles (Move) and charge based on the time of usage of such vehicles. The Appellant is charging GST at 18% on the renting of e-bikes Miracle and Move under HSN Code 9966. The Appellant was of the understanding that the services of renting of e-bikes to customers would be more correctly classifiable under HSN Code 9973 as “Leasing or rental services without operator”.
The Appellant sought for a ruling whether the service of renting vehicles without operator would merit classification under Heading 9973 and be liable to tax in terms of SI.No 17(viia) of the rate Notification No 11/2017 CT (R). The lower Authority gave a ruling in the negative and held that the amendment notification 20/2019 CT (R) dt 30th Sept 2019 only amended the rate of tax for services covered under Heading 9973 but did not amend the classification of the service.
Held that— we do not find any transfer in the right to use the goods and we hold that in the absence of any such transfer of the right to use the goods, the Appellant does not get covered under entry Sl.No 17(iii) of the Rate Notification. The appropriate correct entry is SL.No 17(viia) i.e Leasing or renting of goods and the rate of tax will be the same rate of tax as applicable on supply of like goods involving transfer of title in goods.