Inter-State Supply Of Ambulances To Tripura Government Attracts 28% IGST: AAR

The Telangana Authority of Advance Ruling (AAR) has held that the supply of ambulances to the Tripura government attracts 28% IGST as it is an interstate supply.

The bench of Kasi Visweswara Rao and Sahil Inamdar ruled that 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 the CGST/TGST Act, 2017, and that of services as per Section 13 of the CGST/TGST Act, 2017.

The applicant has a work order for the supply of "mobile common service centers" from the state government department, which is commonly known as ambulances for providing health services. In order to execute the business, they intend to purchase Maruti Suzuki EECO (7-seater) vehicles, and they are required to make the necessary modifications to the vehicles to enable them to use them as mobile common service centers. Modified vehicles (mobile common service centers) will be supplied to the end-user or customer.

The advance ruling was sought in respect of the GST rate for the supply of goods or services and whether the input tax credit on the purchase of vehicles and other components was admissible or not.

The AAR stated that the supply of ambulances to the government of Tripura is an interstate supply that attracts tax under the IGST head. The rate of tax applicable to the commodity under HSN 8703 is 28% for all transactions after September 30, 2021.

The Authority allowed the ITC the purchase such vehicles, which are meant to be modified into ambulances in their workshop, to make further supplies to the government of Tripura on the fulfillment of the conditions for availing of the ITC.

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

Applicant’s Name: Raminfo Limited

Date: 03.04.2023

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