2020 (1) TMI 572 - AAR - GST

Hiring of vehicle to another GTA - Applicant is a registered GTA, as per the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 - whether applicant can hire vehicles to another GTA? - HELD THAT - The services of providing vehicles on hire basis to another GTA is covered under entry no. 22 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 and this entry exempts the services by way of giving on hire a means of transportation of goods to a goods transport agency - Therefore the services provided as a GTA are different from the services provided by way of giving vehicles on hire basis to another GTA hence are independent Of each other so far as tax treatment is concerned. Further there is no provision in the law barring person being a GTA from renting the vehicle to another GTA. However, the tax treatment of these transactions would be as explained earlier. The registered person can be a Goods Transport Agency and also a supplier of goods vehicles to another GTA on hire basis at the same time subject to the appropriate tax treatments as notified in N/N. 11/2017-Central Tax (Rate) dated 28.06.2017, Notification No. 12/2017- Central Tax (Rate) dated 28-06.2017 and N/N. 13/2017-Central Tax (Rate) dated 28.06.2017, as amended from time to time.

Summary

Issues Involved:
1. Interpretation of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 regarding Goods Transport Agency (GTA) services.
2. Tax treatment for services provided by a GTA and services by giving vehicles on hire basis to another GTA.

Analysis:
1. The applicant sought an advance ruling on whether they could be registered as a GTA and provide vehicles on hire to another GTA as per Notification No. 12/2017. The definition of a GTA under the notification includes a person who transports goods by road and issues a consignment note. The applicant's desire to issue consignment notes for transporting goods would make them a GTA under the notification. The tax rates for GTA services are specified in Notification No. 11/2017, with different rates based on certain conditions. Recipients of GTA services are required to pay GST under reverse charge. However, there are exceptions for certain entities as per Notification No. 13/2017.

2. The ruling clarified that being a GTA and providing vehicles on hire to another GTA are distinct services with separate tax treatments. While the tax implications for GTA services are outlined in Notification No. 11/2017, the exemption for providing vehicles on hire to a GTA is covered under entry no. 22 of Notification No. 12/2017. The ruling affirmed that a registered person can simultaneously operate as a GTA and supply goods vehicles to another GTA on hire basis, subject to the specified tax treatments in the relevant notifications.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the legal interpretations provided by the Authority for Advance Ruling in Karnataka.