Notification No. 13/2019 - Central Tax (Rate) Explained

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Notification No. 13/2019 - Central Tax (Rate): which seeks to exempt the hiring of Electric buses by local authorities from GST.

[TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

G.S.R (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the CGST Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.12/2017- Central Tax (Rate), dated the 28^thJune, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 691(E), dated the 28th June, 2017, namely:-

In the said notification, in the Table, against serial number 22, in the entries in column (3), after clause (a), the following clause shall be inserted, namely: -

(3)

‘(aa) to a local authority, an Electrically operated vehicle meant to carry more than twelve passengers; or Explanation.- For the purposes of this entry, “Electrically operated vehicle” means vehicle falling under Chapter 87 in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) which is run solely on electrical energy derived from an external source or from one or more electrical batteries fitted to such road vehicle.’.

2. This notification shall come into force with effect from the 1^st of August, 2019.

(Gunjan Kumar Verma)
Under Secretary to the
Government of India

Note: -The principal notification was published in the Gazette of India, Extraordinary, vide notification No. 12/2017 - Central Tax (Rate), dated the 28^thJune, 2017, vide number G.S.R. 691 (E), dated the 28^thJune, 2017 and was last amended by notification No. 4/2019 - Central Tax (Rate),dated the 29^th March 2019 vide number G.S.R. 251(E), dated the 29^th March 2019.

📚 Frequently Asked Questions (FAQs): Notification No. 13/2019 - Central Tax (Rate)

Q1: What is Notification No. 13/2019 – Central Tax (Rate)?

Answer:
Notification No. 13/2019 – Central Tax (Rate) exempts GST on hiring of electric buses (more than 12 passengers) to local authorities, by amending Notification No. 12/2017.

Q2: From which date is Notification No. 13/2019 applicable?

Answer:
The notification is effective from 1 August 2019.

Q3: Which service is exempt from GST under this notification?

Answer:
Hiring (leasing/renting) of electrically operated buses meant to carry more than 12 passengers, when provided to a local authority, is exempt from GST.

Q4: Who is considered a “local authority” under GST?

Answer:
A local authority includes:
Municipal corporations
Municipal councils
Panchayats
Other authorities legally entrusted with civic functions

Q5: Does this exemption apply to sale of electric buses?

Answer:
No ❌. The exemption applies only to hiring of electric buses, not outright sale.

Q6: Does this exemption apply if electric buses are hired by private companies?

Answer:
No ❌. GST exemption is available only when the service recipient is a local authority, not private entities.

Q7: Is GST exempt on hiring of diesel or CNG buses?

Answer:
No ❌. The exemption applies only to electrically operated vehicles, not fossil-fuel-based buses.

Q8: Can you explain this with a real-life example?

Answer:
📌 Example:
A city municipal corporation hires 50 electric buses (40-seater) from a transport operator for public transport.
✅ Hiring charges → GST exempt
❌ If the same buses are hired by a private company → GST applicable

Q9: Is Input Tax Credit (ITC) available on exempt hiring services?

Answer:
No ❌. Since the outward supply is exempt, ITC on inputs/input services used for providing such service is not available.

Q10: How does this notification support green mobility?

Answer:
It:
Reduces operating cost for local authorities
Encourages faster adoption of electric buses
Makes electric public transport financially viable

Q11: Does the exemption apply to inter-state hiring of electric buses?

Answer:
Yes, as long as:
The vehicle is electric
Passenger capacity exceeds 12
The recipient is a local authority

Q12: Should exempt supplies be reported in GST returns?

Answer:
Yes ✅. Exempt supplies must still be disclosed in:
GSTR-1 (Exempted supplies section)
GSTR-3B (Table 3.1(c))
👉 File accurate GST returns with Finodha:
🔗 https://finodha.in/gst-return-filing/

Q13: Is GST registration required for suppliers of exempt electric bus hiring services?

Answer:
Registration may still be required if the supplier:
Has other taxable supplies, or
Exceeds the registration threshold from taxable turnover
👉 Check eligibility with Finodha GST Registration:
🔗 https://finodha.in/online-gst-registration/

Q14: How does this notification impact electric bus operators?

Answer:
It:
Improves competitiveness of electric bus leasing
Enhances project viability
Encourages long-term government contracts

Q15: Who should carefully review Notification No. 13/2019?

Answer:
This notification is crucial for:
Electric bus operators
Transport contractors
Municipal corporations
Public transport authorities
👉 Get expert GST guidance from Finodha:
🔗 https://finodha.in/gst-compliance/