In re Aeon Financial Consulting LLP (GST AAR Tamilnadu)
Aeon Financial Consulting LLP, a Chennai-based company, applied for an Advance Ruling (AR) under the Goods and Services Tax (GST) Act, seeking clarity on three key issues related to their leasing business. The company intended to lease consumer durables, motor vehicles, mobile phones, and electronic equipment for periods ranging from 6 months to 2 years. The main queries involved whether such leasing constitutes a “continuous supply of services” under GST, whether the total contract price should be treated as the transaction value for GST computation, and whether the residual value of leased assets should be considered the transaction value upon their further supply after lease termination.
The applicant’s business model included purchasing assets, leasing them to registered persons (lessees), and issuing monthly or quarterly invoices with corresponding GST on lease rentals. Upon lease termination, the assets could either be returned, re-leased, or sold based on their residual or market value. The applicant sought confirmation on whether their leasing activities fell under continuous service provision and if their method of invoicing and GST collection was compliant with GST provisions, specifically under Sections 18(6) and 15 of the CGST Act, 2017.
However, during the proceedings, the applicant requested that the case be withdrawn. They communicated their decision not to pursue the matter further, which led to the application being disposed of as withdrawn without a ruling being issued. Consequently, the ARA (Authority for Advance Ruling) accepted the applicant’s request and concluded the matter accordingly, without addressing the merits of the case or making any determinations on the legal issues raised.
