Self-Drive Car Rental Falls Under Leasing or Renting of Goods for GST: AAR
The present application has been filed under section 98 (1) of the CGST Act by a company named EVM Passenger Cars India Private Limited (Applicant) before the kerala Authority for Advance Ruling Goods and Services Tax Department, Tax Tower, Thiruvananthapuram.
The Kerala Authority for Advance Ruling (AAR) has issued a significant ruling on the GST classification and tax rate applicable to self-drive car rental services provided by EVM Passenger Cars India Pvt. Ltd. (EVM Wheels).
EVM operates a self-drive “Rent-a-Car” service across Kerala, offering vehicles without drivers for personal use. All cars are GPS-enabled, and the company maintains substantial control over their operation and movement.
Questions Asked by the Applicant:
The applicant asks the following questions, seeking the present Kerala Authority for Advance Ruling:
“A. Questions on Classification
1. Whether the services rendered by the applicant fall under chapter 99, heading 9973 and service code 997311?
B. Question on applicable GST rate
1. Whether the rate provided in Notification No. 11/2017-Central Tax (Rate) dated 28.6.2017 as amended vide Notification No. 20/2019 CT (R) under Sl. no. 17 (viii) is applicable for the services rendered by the Applicant and the applicable GST rate of tax is 18%.”
AAR’s Decision on Classification
The Kerala Authority for Advance Ruling Goods and Services Tax gave the following answers to the questions asked by the applicant:
Answer 1: The service does not fit under SAC 997311 (transport equipment). Instead, it falls under SAC 997329 “Leasing or rental services concerning other goods”.
Answer 2: The authority decided that for the applicant’s self-drive rental service, the correct GST entry is Serial No. 17(viia) of Notification No. 11/2017. Under this entry, the GST rate is the same as the rate charged on the vehicle itself (for example, 28% for regular cars or 5% for electric vehicles). The authority also clarified that Serial No. 17(viii), which charges a flat 18%, does not apply in this case.
Citation: EVM Passenger Cars India Pvt. Ltd (Kerala Authority for Advance Ruling); AR No. KER/27/2025; 27/08/2025.
