AAR Sets 28% GST as Ambulance Supply to Tripura Govt, an Interstate Supply

The Telangana Authority of Advance Ruling (AAR) has ruled that the supply of ambulances received by the Tripura Government is liable for 28% because it is considered an interstate supply.

The two-judge bench of Kasi Visweswara Rao and Sahil Inamdar held that the tax being levied on goods shall increase during supply under the provisions of Section 12 of the CGST/TGST Act, 2017, and that of services following Section 13 of the CGST/TGST Act, 2017.

The assessee has a work order from the state government department for the delivery of “mobile common service centres,” also known as ambulances to be used as medical services.

They aim to purchase Maruti Suzuki EECO (7-seater) vehicles to carry out the particular transportation, and they must make the essential modifications to the vehicles in order to utilise them as mobile common service centres. The end-user or client will be getting and using modified vehicles (mobile common service centres).

The advance judgement was asked regarding the rate of the GST for the provision of goods or services as well as the eligibility of the input tax credit for the purchase of automobiles and other components.

According to the AAR, providing ambulances to the Tripura government is considered as an interstate supply liable to tax under the IGST head. After September 30, 2021, for any transactions, the tax rate that applies to the commodity covered under HSN 8703 is 28%.

The Authority granted the ITC permission to purchase such vehicles, which are to be converted into ambulances in their workshop, in order to make additional supplies for the Tripuran government after meeting the requirements for ITC eligibility.

The AAR noted that because the term “supply” covers the sale, transfer, barter, exchange, renting, disposal, or leasing of the vehicles, the ITC on the purchase of vehicles intended for the future supply of motor vehicles is not a blocked credit under Section 17(5)(a) of the CGST Act, 2017.