Important Keyword: Notification 37/2017 UTGST Rate, GST on motor vehicle leasing, concessional GST vehicle leasing, GST leasing notification India, pre GST vehicle lease GST, NBFC GST leasing rules, motor vehicle GST concession, GST transition leasing relief, leasing company GST India, vehicle leasing GST compliance,
Words: 1097 Read time: 6 minutes.
Table of Contents
[F.No.354/117/2017- TRU (Pt. III)]
Government of India
Ministry of Finance
Department of Revenue
New Delhi, the 13th October, 2017
Notification No. 37/2017 - Union Territory Tax (Rate): Seeks to prescribe Union Territory Tax rate on the leasing of motor vehicles.
GST: [TO BE PUBLISHED IN THE GAZETTE 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 7 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government, on the recommendations of the Council,
hereby notifies the union territory tax on intra-State supplies of goods, the description of which is specified in column (3) of the Table below, falling under the tariff item, sub-heading, heading or Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), as the case may be, as specified in the corresponding entry in column (2), of the Table below, at the rate specified in corresponding entry in column (4) and subject to relevant conditions annexed to this notification, if any, specified in the corresponding entry in column (5) of the Table aforesaid:
TABLE
| Sl. No. | Chapter, Heading, Sub- heading or Tariff item | Description of Goods | Rate | Condition No. |
| (1) | (2) | (3) | (4) | (5) |
| 1. | 87 | Motor Vehicles | 65% of union territory tax applicable otherwise on such goods under Notification No. 1/2017- Union Territory Tax (Rate) dated, 28th June, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub Section (i), vide G.S.R. 710 (E) dated the 28th June, 2017. | 1 |
| 2. | 87 | Motor Vehicles | 65% of union territory tax applicable otherwise on such goods under Notification No. 1/2017- Union Territory Tax (Rate) dated, 28th June, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub Section (i), vide G.S.R. 710 (E) dated the 28th June, 2017. | 2 |
2. Provided that nothing contained in this notification shall apply on or after1st July, 2020.
Explanation –For the purposes of this notification, -
- “Tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item, heading, sub-heading and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).
- The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.
ANNEXURE
| Condition No. | Condition |
| 1. | The Motor Vehicles was purchased by the lesser prior to 1st July, 2017 and supplied on lease before 1st July, 2017 |
| 2. | The supplier of Motor Vehicle is a registered person.Such supplier had purchased the Motor Vehicle prior to 1st July, 2017 and has not availed input tax credit of central excise duty, Value Added Tax or any other taxes paid on such vehicles |
(Ruchi Bisht)
Under Secretary to
Government of India
📚 Frequently Asked Questions (FAQs): Notification No. 37/2017 - Union Territory Tax (Rate)
Q1: What is Notification No. 37/2017 – UTGST Rate?
Answer:
It is a GST notification prescribing concessional UTGST treatment on leasing of motor vehicles under specified conditions.
The notification mainly benefited pre-GST leasing arrangements.
Q2: What concessional rate was prescribed?
Answer:
The notification prescribed tax at 65% of the otherwise applicable UTGST rate.
This reduced overall GST burden on eligible leasing transactions.
Q3: Which vehicles were covered?
Answer:
Motor vehicles covered under Chapter 87 of the Customs Tariff Act were included.
This broadly covered passenger and commercial vehicles.
Q4: Was the benefit available for all leased vehicles?
Answer:
No.
The notification mainly applied to vehicles purchased before 1 July 2017 and subject to other conditions.
Q5: Why was pre-GST purchase condition important?
Answer:
Because those vehicles had already suffered taxes like VAT and excise duty under the old tax regime.
The concession reduced transition hardship.
Q6: Was ITC restriction applicable?
Answer:
Yes.
Suppliers claiming concessional GST benefit should not have availed specified pre-GST tax credits on those vehicles.
Q7: Did the concession continue permanently?
Answer:
No.
The notification specifically stated that benefit would not apply on or after 1 July 2020.
Q8: Why did the Government introduce this relief?
Answer:
The objective was to smooth GST transition for leasing businesses with pre-GST vehicle fleets and long-term lease contracts.
Q9: Were NBFCs affected by this notification?
Answer:
Yes.
NBFCs and leasing companies were among the major beneficiaries because vehicle leasing formed an important part of their business model.
Q10: Could businesses claim both ITC and concessional GST benefit?
Answer:
Generally no.
The notification imposed restrictions to avoid double tax benefit situations.
Q11: Why is documentation important under this notification?
Answer:
Businesses must prove:
purchase date,
lease timing,
ITC history,
vehicle details.
Without proper records, concessional treatment may be challenged.
Q12: Is this notification still active today?
Answer:
No, the concessional benefit ceased after 1 July 2020 due to the sunset clause.
However, it remains historically important for GST transition understanding.
Q13: Did this notification apply only to UTGST?
Answer:
This notification specifically related to UTGST, though corresponding GST notifications existed under parallel GST laws.
Conclusion
Notification No. 37/2017 – UTGST Rate was an important transitional GST relief measure for the automobile leasing industry.
The notification reduced GST burden on eligible pre-GST leasing arrangements by prescribing concessional tax treatment.
Download PDF: Notification No. 37/2017 - Union Territory Tax (Rate)
More Information: https://taxinformation.cbic.gov.in/
Read more interesting articles:
