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In some respite for car leasing firms, the Finance Ministry on Tuesday said it is reviewing the transition provisions for them under Goods and Services Tax and ways to provide input tax credit.
At present, input tax credit for excise duty is not available for car lease contracts continuing from before the GST regime.
“There is no input tax credit as of now. We are getting a lot of representations on transition for lease service industry. We are looking into it but not sure how to handle it,” said Revenue Secretary Hasmukh Adhia at the fifth session of the GST ki Masterclass .
Under GST, leasing of cabs attracts about 29 per cent to 43 per cent tax, as against the earlier incidence of about 14.5 per cent.
Further, these lease rental companies as well as cab aggregators do not get any input tax credit for existing contracts.
Meanwhile, responding to another query, the Revenue Secretary said that service charge by restaurants will also attract GST.
“Some restaurants levy service charge. It is not service tax but more like a compulsory tip. Along with the food bill, the service charge will also be included in the final amount and will attract State and Centre GST,” he said.
If alcohol was also consumed, value-added tax would be charged separately in the receipt, he added.
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