Transfer of right to use goods is supply of goods or supply of service under GST ?

By | March 14, 2017
(Last Updated On: March 14, 2017)

Query:   Whether transfer of right to use goods will be treated as supply of goods or supply of service?

Answer:  Transfer of right to use goods shall be treated as supply of service because there is no transfer of title in such supplies. Such transactions are specifically treated as supply of service in Schedule-II- Point 5(g)  of Revised Model GST Law

Relevant Extract of  SCHEDULE II of Revised Model GST Law

5.The following shall be treated as “supply of service” 

…….

(g) transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; and

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