GST BILLING OF FURNITURE ON RENT TO OWN UPON PRE-CLOSURE OF RENTAL AGREEMENT.

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This query is : Resolved

Shankar Srinivasan (Querist)

20 November 2023 We entered with an agreement for 2 years for Furniture on RENT which the ownership shall be transferred to the LESSEE either after expiry of 2 years or upon pre-closure of the RENT AGREEMENT with mutually agreed terms.

Now , how to do the GST billing for transfer of the furniture ( by sale).

Example: Basic product cost of the Furniture on rent is Rs. 6,00,000. The principal value of the furniture per month is ( 600000/24 months) = 25,000.
The intrest agreed is 18% per year and total intrest for 2 year is ( 600000x 18% = 108000) Rs.2,16,000 and per month is ( 216000/24months )= rS. 9000 per month.
So total Rent per month is Rs. 25000 ( value of furniture) + 9000 ( intrest component) = Rs. 34,000 per month.

The LESSEE paid RENT for 4 months ( total Rs. 34000 x 4 = 136000). Now the LESSEE wanted to buy the furniture on its cost price.

Total cost price of the furniture Rs. 6,00,000
Less : Principal amount paid for 4 months + 25000 x 4 = 100000
Sale value of the Furniture is Rs. 600000-100000= 500000/=

My query is :

is Eway bill applicable for sale of the furniture ? ( the furniture on RENT was transfered through Eway bill with Delivery Note) and what will be the HSN /SAC code for this transaction.