The West Bengal Authority for Advance Ruling (AAR) ruled that the hiring of fitted assets, including air-conditioning systems, fire sprinklers, diesel generator (DG) sets, and electric installations, is categorized as a leasing or rental service and is subject to an 18% Goods and Services Tax (GST).
The AAR made the ruling against an application submitted via TCG Urban Infrastructure Holdings Private Limited, a real estate development company who is in leasing commercial properties and furnishes the fitted assets on hire to tenants at properties held by Bengal Intelligent Parks Private Limited (BIPPL) and BIP Developers Private Limited (BIPDPL), subsidiaries of the applicant in India and furnishing related consultancy services.
The representatives of the applicant Chartered Accountants (CA), Priyajit Ghosh, Vikash Agarwal, and Yamini Agarwal, asked for an advance ruling to comprehend the classification of services to hire of the fitted assets and the applicable GST rate.
TCG Urban Infrastructure has been applying a 28% GST under SAC 997314. However, there is a query regarding whether these services should instead be taxed at 18% under SAC 997314 as ‘leasing or rental services involving office machinery and equipment’ or classified as ‘support services’ under SAC 998599.
Reference was made before the decision of West Bengal AAR in a case instituted by Sun Knowledge Private Limited, a client of the Applicant raising concerns about 28% GST on “Hire of Assets”.
The AAR held that each of the supplies there shall draw GST of 18% under serial number 17(iii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.
The two-member bench, Tanisha Dutta, Joint Commissioner, CGST & CX, and Joyjit Banik, Additional Commissioner, SGST reviewed the business model of the petitioner and observed that the petitioner furnished tenants with pre-installed infrastructure such as electrical wiring, heating, ventilation, and air conditioning (HVAC) systems, sprinkler fire-fighting systems, and backup DG sets and charges a monthly hire fee on the same.
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It was carried by the bench that the supply of hiring services of air-conditionng systems, fire sprinklers, DG sets, and electric installations comes under “leasing or rental services, without operator,” which is explicitly covered under Serial No. 17(viii) of Notification No. 11/2017-Central Tax (Rate) with each of the supplies drawing 18% GST.
| Case Title | TCG Urban Infrastructure Holdings Private Limited |
| GSTIN | 19AADCS8821M1ZS |
| Case Number | WBAAR 12 of 2024 |
| Date | 14.01.2025 |
| For the Applicant | Mr. Priyajit Ghosh, Mr. Vikash Agarwal, Ms. Yamini Agarwal |
| West Bengal GST AAR | Read Order |
