2022 (6) TMI 462 - AAR - GST

Liability of GST - person liable to pay GST for transportation of goods of customers located by an independent agency engaged by the applicant - refrigerated vehicles used for transportation of the applicant s goods travelled back on return journey, after unloading and delivering the applicant s goods at the destination - person liable to GST for transportation of goods of the customers located by an independent agency when the vehicles used for transportation of the applicant s goods are used for further transportation, after unloading the applicant s goods at the destination of the applicant s branches or depots - person liable to pay GST in respect of goods transport agency service used for bringing back empty plastic trays belonging to the applicant from various places (like branches or depots) to the applicant s premises - Availment of Input Tax Credit of the entire amount of GST paid on the transaction of the applicant s goods in refrigerated vehicles although such vehicles travel empty (i.e. without the applicant s goods being loaded therein) during the return journey. HELD THAT - The Serial no 1 to the Notification 13/ 2017-CT (R) dated 28-6-17 reads that the GST liability for supply of service by a GTA in respect of transportation of goods by road to a registered person shall be paid by the recipient of such services. We find M/s Vadilal liable to GST under RCM for the GTA service supplied to it. As per GST scheme of law, consignment note issuance, by whatever name called, is mandatory for a GTA. The issuance of consignment note indicates that the lien on goods has been transferred to the transporter and the transporter becomes responsible for the goods till its safe delivery to the consignee. This aspect is evident in the relationship between Vadilal and its GTA but is absent in the relationship between Vadilal and Celcius - the requirement of consignment note issuance by a GTA cannot be brushed aside - there are no merit to deem Vadilal as a GTA. Person liable to pay GST for transportation of goods of customer of Celcius (an independent agency engaged by Vadilal) - HELD THAT - Vadilal has no locus standi, vide Section 95 CGST Act, to seek Ruling on the tax liability for a transaction entered between M/s Celcius and its (Celcius s) customers, wherein Celicus is the service provider and its customers are the service recipient - Section 103(1) CGST Act, which reads that Advance Ruling shall be binding only on the applicant who had sought it and on the concerned officer/ jurisdictional officer in respect of the applicant. In this case, our Ruling is binding on the Vadilal. This subject Ruling, vide Section 103(1) CGST Act is not binding on Celcius and its service recipients. Further, Section 95(a) CGST Act defines advance ruling as a decision provided in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.

Issues Involved:
1. Liability to pay GST for transportation of goods of customers located by an independent agency during the return journey of refrigerated vehicles.
2. Liability to pay GST for transportation of goods of customers located by an independent agency when vehicles are used for further transportation after unloading the applicant's goods.
3. Liability to pay GST for goods transport agency service used for bringing back empty plastic trays.
4. Admissibility of Input Tax Credit (ITC) on GST paid for the round trip of refrigerated vehicles, including the return journey when vehicles travel empty.

Issue-Wise Analysis:

1. Liability to Pay GST for Transportation of Goods of Customers Located by an Independent Agency During the Return Journey:
Vadilal argued that the reverse charge mechanism under Notification No. 13/2017-CT (Rate) applies, making either the independent agency (M/s. Celcius Logistics) or the customers whose goods are transported liable to pay GST. The Authority, however, found that Vadilal provides Business Support Services to Celcius, enabling Celcius to transport its customers' goods. Vadilal is not considered a Goods Transport Agency (GTA) as it does not issue consignment notes and does not take responsibility for the safe delivery of the goods. Therefore, Vadilal is not liable to pay GST as a GTA, and the tax liability is on forward charge for the Business Support Services provided to Celcius.

2. Liability to Pay GST for Transportation of Goods of Customers Located by an Independent Agency When Vehicles are Used for Further Transportation:
Similar to the first issue, Vadilal's role in facilitating the transportation of goods by Celcius does not make it a GTA. The Authority reiterated that Vadilal supplies Business Support Services to Celcius and is not responsible for the goods transported. The tax liability remains on forward charge for the services provided to Celcius. Vadilal has no locus standi to seek a ruling on the GST liability for transactions between Celcius and its customers.

3. Liability to Pay GST for Goods Transport Agency Service Used for Bringing Back Empty Plastic Trays:
The Authority agreed with Vadilal's submission that it is liable to pay GST under the reverse charge mechanism for the transportation charges paid to independent transporters for bringing back empty plastic trays. This is in accordance with Serial No. 1 of Notification No. 13/2017-CT (Rate), which specifies that the recipient of GTA services is liable to pay GST.

4. Admissibility of Input Tax Credit (ITC) on GST Paid for the Round Trip of Refrigerated Vehicles:
The Authority concurred with Vadilal's submission that ITC is admissible on the GST paid for the round trip of refrigerated vehicles, even if the vehicles travel empty during the return journey. Vadilal pays an agreed freight for the entire round trip, which includes both the onward and return journeys. Therefore, the ITC on the entire GST paid is admissible, as the transportation charges are treated as a composite transaction for the round trip.

Ruling:
1. Vadilal is not a Goods Transport Agency and supplies Business Support Services to Celcius. The tax liability for these services is on forward charge. Vadilal has no standing to seek a ruling on the GST liability for services provided by Celcius to its customers.
2. Same as above ruling.
3. Vadilal is liable to pay GST under the reverse charge mechanism for the freight charges paid to its transporters for bringing back empty plastic trays.
4. ITC on GST paid for the round trip of refrigerated vehicles, including the return journey when vehicles travel empty, is admissible to Vadilal.

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