Lease transaction between distinct persons exigible to GST

The Applicant had sought an advance ruling to ascertain whether lease charged for the supply of equipment to its other branches across India will be considered as supply u/s 7 of the CGST Act. 

The AAR observed that as per the entry in Schedule I of the CGST Act, there can be supply of goods or services between distinct entities even in case no consideration is involved. Accordingly, it was held that the transaction made by the Applicant would be taxable. It was further held the normal value which would be derived after taking into consideration the lease rate would be the value on which GST has to be charged in terms of Section 15 of the CGST Act.

Chep India Private Limited [NO.GST-ARA-82/2020-21/B-111]

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