GST on Rent of Machine

This query is : Resolved

Quick Summary

If you purchase a machine in India and rent it out to a client in Dubai, receiving payment in foreign exchange, GST implications need careful consideration. While the supply originates in India, the place of use in Dubai is crucial. This scenario may qualify as an export of service, which is zero-rated under GST, meaning no GST is payable on the invoice, but you can claim input tax credits.

MAKARAND DAMLE

MAKARAND DAMLE (Querist)
Follow

11 July 2025 Assessee will purchase machine in India and will give the same on rent to client in Dubai.
He will charge rent to Dubai Client and will receive money in foreign exchange

My question is whether GST is applicable on Rent received ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

13 July 2025 Yes, the supply is from India.

MAKARAND DAMLE

MAKARAND DAMLE (Querist)
Follow

16 July 2025 MACHINE WILL BE PURCHASED IN INDIA BUT THE USE OF THE MACHINE WILL BE IN DUBAI
SO PLACE OF SUPPLY IS OUTSIDE INDIA AND FOREIGN EXCHANGE WILL BE RECEIVED

STILL GST IS APPLICABLE ON INVOICE RAISED ON DUBAI CLIENT ?

MAKARAND DAMLE

MAKARAND DAMLE (Querist)
Follow

16 July 2025 ALSO THE MACHINE WILL BE EXPORTED TO DUBAI FOR USE

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

16 July 2025 Renting out a machine is considered a supply of service under GST if the machine is supplied/used for business or commerce.

If a service is supplied from India to a foreign client and payment is received in foreign currency, it can potentially qualify as an export of service, which is a zero-rated supply under GST (i.e., GST is not payable, but input tax credit/refund can be claimed).

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
Follow

26 September 2025 Good luck...

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now