GST rate on Courtesy Car given on Rent to Director by the Motor Vehicle Dealership

Vehicle Rental Services Details -

*HSN Code*: The HSN code for vehicle rental services, specifically for road vehicles like cars, is *996601*. 

This code applies to rental services of road vehicles, including buses, coaches, cars, trucks, and other motor vehicles, with or without an operator. -

 *GST Rate*: The GST rate for vehicle rental services can vary. According to the SAC code 996601, the applicable GST rates are¹: - *5%*:

 In certain cases, with specific conditions. - *12%*: In other cases, with specific conditions. - *18%*: Without any conditions.

 Conditions for GST Rates To determine the exact GST rate, consider the following: -

*Input Tax Credit (ITC)*: If the company has taken ITC on goods and services used for supplying the rental service, the GST rate might be affected. - 

*Specific Line of Business*: If the company procures services from another service provider for transporting passengers or renting motor vehicles, ITC might impact the GST rate. 

Application to Your Scenario - 

*Renting to Director*: When renting the courtesy car to a director, the company should charge GST based on the applicable rate (5%, 12%, or 18%) depending on the specific conditions and ITC status. -

 *Renting to Customers*: Similarly, when providing cars to customers for 1-2 months, the company should apply the relevant GST rate based on the conditions and ITC status.

 It's recommended to consult a tax professional to determine the exact GST rate and ensure compliance with GST regulations.