GST exemption on hiring/leasing of buses by APSRTC to Public Transport Division

In re Andhra Pradesh State Road Transport Corporation (GST AAR Andhra Pradesh)

Whether the transaction of hiring/leasing of buses by the APSRTC to the Public Transport Division (PTD) of Government of Andhra Pradesh is eligible for the exemption under Entry 22 of Notification No. 12/2017 Central Tax (Rate).

In the instant case, it is clear that the Government of Andhra Pradesh had created a separate undertaking under the name and style of ‘Public Transport Department’ (PTD) which will operate under the Administrative control of Transport, Road and Buildings Department.

Thus, the ‘Department of Public Transport’ fits into the above definition of ‘Undertaking’, meant for ‘Transport’ carried by the State Government.

7.4 With the foregoing, we concur with the premise of the applicant that ‘the hire services provided by APSRTC to the ‘Public Transport Department’ can be considered as services by way of giving on hire to a State Transport undertaking’ and is eligible for exemption by way of SI. No. 22 of Exemption Notification No. 12/2017 Central Tax (Rate).

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