Advance Ruing - Rate of tax(Goods) - The applicant M/s. Raminfo Limited have submitted that they have a new business opportunity at hand and they would like to understand the provisions related to; the business which they are intended to undertake the opportunity. That they have a work order for supply of Mobile common service centres" from State government department, which are commonly known as Ambulances for providing health services. Applicant raised following questions -

1. What is the rate of GST for supply of goods or services or both?

2. How to determine the liability to pay tax on any goods or services or both?

3. Whether the input tax credit on purchase of vehicles and other components as admissible or not?

Authority for Advance Ruling, Telangana held that :- 

1. The transaction of supply of ambulances to government of Tripura attracts IGST as it is an inter state supply. The rate of tax applicable to the present commodity, with HSN 8703, is 28%

2. As it is an inter-State supply the liability to pay tax would arise under IGST head. The liability to pay tax on goods shall arise at the time of supply, as determined in accordance with the provisions of section 12 of CGST/TGST Act’ 2017 and that of services as per section 13 of CGST/TGST Act’ 2017. The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both, to government of Tripura as stated in the FORM GST ARA-01, as per section 15 of CGST/TGST Act’ 2017.

3. Input tax credit on purchase of such vehicles, which are meant to be modified into ambulances in their workshop at Hyderabad, Telangana State to make further supplies to government of Tripura, is admissible provided the applicant fulfils the conditions for availment of ITC as detailed in provisions of Section 16 of CGST/TGST Act’ 2017.

As per Section 17(5)(a) of CGST/TGST Act’ 2017 the ITC on purchase of such vehicles which are meant for further supply of such motor vehicles is not a blocked credit as the definition of ‘supply’ includes sale, transfer, barter, exchange, renting, disposal or leasing of such vehicles.