2020 (6) TMI 643 - AAAR - GST

Supply of goods or not - transport of money by cash-carry vans - goods or not - levy of GST - rate of GST and/or Compensation Cess - Input tax credit. Whether the money being transported by the Appellant in the cash carry vans can be construed as goods or otherwise for the purposes of determining the availability of Input Tax Credit of the GST paid on the purchase and fabrication of the subject transport vehicles? HELD THAT - On perusal of Rule 138 (14) of the CGST Rules, 2017, it is clearly evident that only goods are mentioned therein as well as in the annexure thereto. Among those goods, one of the items mentioned in the annexure bearing the heading Description of Goods is money , which clearly indicates that the legislature has considered money as goods , when money is being transported from one place to another. By applying the above interpretation in the present fact and circumstances of the case in hand, it can decisively be inferred that money under question is nothing but goods. The transportation of the currency for the purpose of cash replenishment in ATMs operated by the Appellant s clients are being regulated by RBI in the capacity of the Regulatory Authority, the guidelines of which have to be mandatorily complied with by the Appellant for carrying out their activities. Therefore, the compliance of the guidelines issued by the RBI will not detract the subject money from being goods. Further, non- applicability of the RBI guidelines on the goods other than money is quite obvious, as the RBI is the regulatory authority only in the matter related to the money and not for all the goods. Hence, such arguments, put forth by the Respondent is erroneous and absurd, and do not merit to be considered. Input tax credit - HELD THAT - Now, when it has been established that money, transported by the Appellant in the cash -carry vans, can be considered as goods, ITC in respect of the cash carry vans used for the transportation of cash will be available to the Appellant in accordance with provisions of section 17 (5) (a)(ii) of the CGST Act, 2017.

Summary

Issues Involved:
1. Whether supply of motor vehicles as scrap after usage can be treated as supply in the course or furtherance of business and whether such transaction would attract GST.
2. Whether Input Tax Credit (ITC) is available on the purchase of motor vehicles used for cash management business and supplied post usage as scrap.

Issue-Wise Detailed Analysis:

1. Supply of Motor Vehicles as Scrap:
The Appellate Authority for Advance Ruling (AAAR) held that the supply of motor vehicles, i.e., cash carry vans, as scrap after usage, will be treated as supply in the course or furtherance of business under Section 7 of the CGST Act, 2017. Such transactions would attract GST as the disposal of cash carry vans is a transaction incidental to business. The sale proceeds of such vans are treated as income and reflected in the Profit & Loss Account, marking such transactions as taxable supply attracting GST. However, the rate of GST was not specified due to the absence of invoices or tariff headings provided by the applicant.

2. Input Tax Credit on Purchase of Motor Vehicles:
The AAAR initially denied ITC on the purchase and fabrication of cash carry vans, stating that currency transported by the appellant would not be considered as goods under Section 2(52) of the CGST Act, 2017, which excludes money from the definition of goods. However, the Bombay High Court set aside this decision, directing the AAAR to reconsider the case, considering the appellant’s submissions.

Upon reconsideration, the AAAR examined the context in which the cash carry vans are used. The appellant argued that the currency transported is not used as legal tender but as goods, as they act merely as bailees for their clients. The currency transported cannot be used for any other purpose, thus not fitting the definition of money under Section 2(75) of the CGST Act, 2017. The AAAR concurred with this view, noting that the currency in the context of the appellant’s operations is goods, not money.

The AAAR also noted that Rule 138(14) of the CGST Rules, 2017, which lists goods not requiring e-way bills for transportation, includes currency, indicating that the legislature considers currency as goods in the context of transportation.

Conclusion:
The AAAR concluded that the money transported by the appellant in cash carry vans is considered goods. Consequently, ITC on the purchase and fabrication of these vehicles is available under Section 17(5)(a)(ii) of the CGST Act, 2017, which allows ITC for motor vehicles used for the transportation of goods. The order held that ITC against the GST paid on the purchase and fabrication of motor vehicles used for carrying cash and bullions is available to the appellant.