Applicability Of Igst For Renting Of Machinery Of Equipment For Commercial Purpose To Inter-State

Abhishek Roy
watch_later 1 month, 3 weeks ago

Dear All,

I am working as a accountant in an eCommerce Company I need to have certain queries relating to GST Input.

Our Company is in Delhi and our MD has also another company in Ludhiana he has purchased AC for our company in situated in Delhi via Company situated in Ludhiana on Bill to Ship to Basis.

As per rule If we issue a Purchase Order in the name of the company situated in Ludhiana then they can issue the Sale Bill and we can transfer the Fixed assets in our books by purchasing it as well as we can take the Input Credit accordingly and moreover Depreciation can also be booked as per valuation in our Books

But our Management in Delhi want to the take the asset on lease from the company situated in Ludhiana as per lease agreement.

My question is the can the company situated in Ludhiana can issue a inter-state (GST) Rental Invoice on movable property currently provided in Delhi, if so can we be able to take the IGST credit on such rental invoice................................?

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1 Answer

CA Shubham Bansal watch_later 3 weeks, 6 days ago


As per Place of supply provisions, there is no restriction on raising Interstate invoice for the services which is being utilised in actual place of consumption which is Delhi in this case. Your transaction is actually leasing of the plant and machinery and not any property which is altogether a different transaction and tax rate of GST also to be charged accordingly. Asset(AC) should be in ownership of Ludhiana Co. and Delhi Co. can enter into the lease transaction but Valuation aspect needs to be taken care of if both are related parties.

Conclusion - No restriction on raising interstate invoice and no restriction further on availment of its ITC.

For any further Query please feel free to contact

Ph. +91-79869-39559


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