In re Yulu Bikes Pvt Ltd (GST AAAR Karnataka)
The Appellate Authority set aside the ruling No.KAR ADRG 49/2020 dated: 30.09.2020 passed by the Advance Ruling Authority and answer the question of the Appellant as follows:
‘Renting of e-bikes/bicycles without operator is classifiable under SAC 9973 – Leasing or rental services without operator and rate of tax as applicable under entry Sl.No.17(viia) of Notification no. 11/2017 CT(R) dated 28th June 2017 as amended is applicable to the instant case.’
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING, KARNATAKA
1. At the outset we would like to make it clear that the provisions of CGST, Act 2017 and SGST, Act 2017 are in parimateriaand have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act.
2. The present appeal has been filed under section 100 of the Central Goods and Service Tax Act 2017 and Karnataka Goods and Service Tax Act 2017 (herein after referred to as CGST Act, 2017 and SGST Act, 2017) by M/s Yulu Bikes Pvt Ltd, Villa 119, Adarsh Palm Retreat, Devarabeesanahalli, Bellandur, Bangalore 5 60103 (herein after referred to as Appellant) against the Advance Ruling order No. KAR ADRG 49/2020 dated: 13th October 2020.
Brief Facts of the case:
3. The Appellant is engaged in renting of vehicles like e-bikes (Miracle), bicycles (Move) in Bengaluru, Karnataka through a technology driven mobility platform. They enter into contract/agreement with the customers with regard to usage / renting of the e-bikes (Miracle), bicycles (Move) and charge based on the time of usage of such vehicles. The Appellant is charging GST at 18% on the renting of e-bikes Miracle and Move under HSN Code 9966. The Appellant was of the understanding that the services of renting of e-bikes to customers would be more correctly classifiable under HSN Code 9973 as “Leasing or rental services without operator”.
4. In this regard, the Appellant approached the Authority for Advance Ruling (AAR) seeking a ruling on the following question:-
“Whether renting of e-bikes (Miracle), bicycles (Move) without operator can be classified under the SAC 9973 – Leasing or rental services without operator – Sl.No.17 (viia) of Notification no. 11/2017 CT(R) dated 28th June 2017 as amended? “
5. The AAR vide its order KAR ADRG No 49/2020 dated 13th October 2020 held as under:-
“Renting of e-bikes/bicycles without operator cannot be classified under SAC 9973 – Leasing or rental services without operator and Sl.no. 17(viia) of Notification no. 11/2017 CT(R) dated 28th June 2017 as amended is not applicable to the instant case. “
6. Aggrieved by the ruling given by the AAR, the Appellant has filed this appeal on the following grounds.
6.1. The Appellant submitted that prior to October 1st 2019, in the scheme of classification of services notified vide Rate Notification no. 11/2017 CT(R) dated 28th June 2017 , there were two categories of headings which related to the supply made by them viz; Heading 9966 -Rental services of transport vehicles with or without operators and Heading 9973 – Leasing or rental services with or without operator; that they classified their supply under HSN 9966 as rental services of transport vehicles with or without operators and were charging GST at 18% in terms of Sl.No 10(iii) of Notification no. 11/2017 CT(R) dated 28th June 2017 ; that with effect from 1st October 2019, Notification no. 11/2017 CT(R) was amended vide Notf No 20/2019 CT (R) dated 30th Sept 2019 and Headings 9966 and 9973 were amended as follows:
