Leasing is one of the types of «one asset» financing. It is a system by which the owner of the goods rents, on an appointment, the rental of periodic payments by the tenant which, when a certain number of payments is made, is transferred to the tenant the absolute ownership of the goods, so that the tenant can return the goods at any time without the obligation to pay a rental balance following the restitution, until the conditions are met, so that the property remains at the disposal of the owner.» [Jowitt`s Dictionary of English law, 2nd edition]. To cover such transactions, the Hire Purchase Act of 1972 was passed by the Indian Parliament. The Act was scheduled to come into force on June 1, 1973. GSR 222 (E) of 30 But this communication was abolished by G. S. R. 288 (E), date of 31-5-1973, and the act came into force from 01-09-1973, but this communication was also cancelled by G. S. R. 402 (E) of 30-09-1973. Subsequently, this law was repealed by Act 31 of 2005.

The Hire Purchase Act of 1972 did not in fact create/launch the «lease-sale form» but was merely intended to define and regulate the rental rights and obligations of the parties. Currently, there is no separate and specific law on leasing. Subject to the general provisions of the General Goods Contract and Sale Act contained in the Indian Contract Act, 1872 and Sale of Goods Act, 1930, lease-sale transactions are fully subject under the terms of the agreement between the owner of the goods and the lessor. Although repealed, the provisions of the aforementioned legislation are still relevant to understanding the nature of the hate purchase transaction. If you sign a lease agreement on or after July 1, 2012, all items of the delivery under the agreement are taxable, whether or not the credit component is disclosed separately. All related costs and expenses, such as . B, the late costs incurred under the lease-sale agreement are also subject to the GST. Any transfer of ownership of goods under an agreement to ensure that ownership of the goods flows later with the payment of the full consideration as agreed is a shipment of goods [paragraph 1) c) of Schedule II of the CGST Act, 2017].