Passenger Transportation And Renting Of Motor Vehicle With Operator Attracts Same GST Rate Or Compensation Cess As Supply Of Motor Vehicles By Way Of Sale: CBIC

The Central Board of Indirect Taxes and Customs (CBIC) has clarified that input services in the same line of business include transport of passengers (SAC 9964), renting of motor vehicles with operators (SAC 9966), and not leasing of motor vehicles without operators (SAC 9973), which attracts GST and/or compensation cess at the same rate as supply of motor vehicles by way of sale.

The Board has issued the clarification in respect of the recommendations of the GST Council in its 52nd meeting held on October 7, 2023, in New Delhi with reference to the GST levy.

The issue was whether the 'same line of business’ in the case of passenger transport service and renting of motor vehicles included the leasing of motor vehicles without operators.

Services of transport of passengers by any motor vehicle (SAC 9964) and renting of motor vehicles designed to carry passengers with operators (SAC 9966), where the cost of fuel is included in the consideration charged from the service recipient, attract 5% GST with input tax credit for services in the same line of business.

The 'same line of business' as stated in notification No. 11/2017: Central Tax (Rate) means “service procured from another service provider of transporting passengers in a motor vehicle or renting of a motor vehicle”.

Circular No. 206/18/2023-GST

Click Here To Read The Circular