2020 (6) TMI 543 - AAR - GST

Exemption from Service Tax - Inland waterways - business of providing services in relation to transportation of goods from Magdalla Port to the General Lighterage Area (Anchoring Point of Mother Vessel) or vice versa - covered under exemption contained at Sr. No. 18 of Notification No. 12/2017Central Tax (Rate) or not - covered in the definition of Inland waterways - HELD THAT - The applicant is providing service relating to transportation of goods in the water way, i.e. from Magdalla Port to its General Lighterage Area (Anchoring Point of Mother Vessel) or vice versa. This waterway is a part of the Arabian Sea. Whereas, the term Other waterway on any inland water covers any canal, river, lake or other navigable water within a State only. The length of the waterway, between which the service of transport is performed by the applicant, is the part of the Arabian Sea and not a part of any canal, river, lake or other navigable water within a State. Thus, their contention, that the transportation is being done on the River Tapi, appears to be incorrect. As regard the contention that the entire activity is being done by them under territorial water only, it is worthwhile to mention that the Arbian Sea is not a part of the State of Gujarat and, hence, not covered under the term Other waterway on any inland water so as to be eligible for exemption of the Services by way of transportation of goods by inland waterway - the service of transportation of goods in barrages from mother vessel to daughter vessel from Magdalla Port, Surat to its General Lighterage Area of Magdalla Port does not get covered in the definition of other waterway on any inland water , as defined under Clause (b) of Section 2 of the Inland Vessel Act, 1917. Thus, the service of transportation of goods in barrages from mother vessel to daughter vessel from Magdalla Port, Surat to its General Lighterage Area of Magdalla Port is neither covered in the definition of national waterways , as defined in Clause (h) of section 2 of the Inland Water Ways Authority of India Act, 1985 nor covered in the definition of other waterway on any inland water , as defined under Clause (b) of Section 2 of the Inland Vessel Act, 1917. Consequently, the same does not qualify for exemption contained at Sr. No. 18 of the Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017.

Summary

Issues:
1. Exemption of transportation services under Notification No. 12/2017-Central Tax (Rate).
2. Classification of transportation service under the definition of 'Inland waterways.'

Exemption of Transportation Services:
The applicant sought an advance ruling on whether the transportation of goods from Magdalla Port to its General Lighterage Area falls under the exemption provided by Entry No.18 of Notification No.12/2017-Central Tax (Rate). The applicant argued that since the transportation is within the state of Gujarat and involves the River Tapi, it qualifies as an inland waterway exempt from GST. However, the ruling authority analyzed the definitions of 'national waterways' and 'other waterway on any inland water' as per relevant laws. It was observed that the transportation route did not fall under the definitions provided, leading to the conclusion that the service did not qualify for the exemption under the said notification.

Classification under 'Inland Waterways':
The ruling authority delved into the definitions of 'national waterways' and 'other waterway on any inland water' to determine if the transportation service met the criteria to be classified as an inland waterway. It was noted that the transportation route in question did not align with the definitions provided in the laws, specifically in terms of being part of the Arabian Sea rather than a navigable water within the state. As a result, the service of transportation of goods from Magdalla Port to its General Lighterage Area was deemed not to fall under the classification of 'Inland waterways.' Consequently, the ruling was made against the applicant, denying the exemption sought under the notification.

Conclusion:
The ruling authority concluded that the transportation service from Magdalla Port to its General Lighterage Area did not qualify for the exemption under Notification No. 12/2017-Central Tax (Rate) as it did not meet the criteria for classification as 'Inland waterways.' The ruling was made against the applicant on both issues presented, highlighting the ineligibility of the service for the exemption based on the definitions and criteria analyzed.