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2021 (8) TMI 525 - AAR - GSTClassification of services - transportation of goods by road - intermediary between the truck owners and goods transportation agencies for transportation of goods by road - HELD THAT - The applicant is engaged in the business of transportation of goods by road wherein he acts as an intermediary between truck owners and goods transportation agencies. The issue at hand is the classification of the service provided by the applicant by way of arranging trucks to the GTA and the rate of tax applicable for the said service. In terms of provisions of Section 2(13) of the IGST Act, 2017, an Intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account. The applicant arranges trucks to the goods transport agency and charges the commission or brokerage for the said service and falls within the ambit of 'Agent' under the CGST/SGST Act - The service provided by the applicant in relation to transportation of goods fall under the serial No.11 under the Heading 9967(ii) supporting services in transport other than services of Goods Transport Agency and liable to be taxed @18% as per the N/N. 11/2017 Central Tax (Rate) dated 28.06.2017.
Issues Involved:
Classification of services provided by the applicant as an intermediary between truck owners and goods transportation agencies for transportation of goods by road under GST laws. Analysis: The Authority for Advance Ruling, Andhra Pradesh, addressed the issue raised by an unregistered applicant acting as an intermediary between truck owners and goods transport agencies. The applicant sought clarification on the classification of services provided. The applicant's role involved earning commission from truck owners, deducted from amounts received from the goods transport agency (GTA) or directly paid by the GTA to truck owners. The key question was whether the applicant falls under the category of transportation of goods by road, commission agents, or goods transport agencies, along with the classification under the Harmonized System of Nomenclature (HSN) code and determination of turnover. The Authority examined the applicant's business model and the legal framework under the GST Acts. It was established that the applicant, acting as an intermediary arranging trucks for the GTA and charging commission, falls under the definition of an "Agent" as per the CGST/SGST Act. The service provided by the applicant was categorized under serial No.11, Heading 9967(ii) as supporting services in transport other than services of Goods Transport Agency. Consequently, the applicable tax rate for the service was determined to be 18% (9% CGST + 9% SGST) as per Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017. In conclusion, the Authority ruled that the applicant would be classified as an "Agent" providing supporting services for the transportation of goods under the specified HSN code. The amount received by the applicant in the form of commission would be considered a part of the turnover. The ruling provided clarity on the taxability and classification of the services rendered by the applicant, ensuring compliance with the provisions of the Central Goods and Services Tax Act, 2017, and the Andhra Pradesh Goods and Services Tax Act, 2017.
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