M/S A.(india) is a company who imports capital goods like machinery and give that machinery to M/s B(india) as an investment as per their agreement but not as a sale and M/s A generates income from M/S B.
In the form of money, I have a confusion regarding the applicability of GST on the above services and what will be the accounting entries respectively.
You have transferred right to use and not title. However this is taxable under GST.
You need to find out the rate of tax on this machine if sold, and charge same rate on rent or lease amount you received.
For example, if rate of tax on machine is 18% then you need to charge 18%.
You can check GST rate of renting of machine.
| 9973 | (vi) Leasing or rental services, with or without operator, other than (i), (ii), (iii), (iv) and (v) above. | Same rate of integrated tax as applicable on supply of like goods involving transfer of title in goods |
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