TAXABILITY ON TRANSPORTATION OF GOODS OTHER THAN BY ROAD

[Rachit Agarwal]

TAXABILITY ON  TRANSPORTATION OF GOODS OTHER THAN BY ROAD

Broad there are six modes of transportation of goods by

1. Road
2. Rail
3. Aircraft
4. Vessel
5. Pipeline
6. Conveyor Belt

Taxability of above transactions has been listed under Serial No-9 and 10 of of the Notification No- 11/2017- Central Tax Rate dated 28.06.2017.

Owner of the Transport Vehicle either may do the transportation of goods on his account or may lease/ rent out the Transport Vehicle to others. Taxability of such transactions has been listed under Serial No- 10 and Serial No-17 of the Notification No- 11/2017- Central Tax Rate dated 28.06.2017

Transportation of Goods are taxable at rate of 5% subject to the condition that no credit of input tax has been availed subject to certain exceptions. Concessional rate in case of transportation of goods by road is applicable to the recipient under reverse charge. Liability to pay tax under reverse charge has been listed in Notification No-13/2017- Central Tax Rate dated 28.06.2017

Taxability of the above services shall be at a tax rate as state under Serial No- 9 of Notification No- 11/2017 Central Tax Rate dated 28.06.2017 and as amended from time to time

Further option to avail the credit of input tax is available for the

1. Transportation of goods by road wherein the service provider opts to pay tax at a higher rate of 12%- Serial No- 9(iii) of Notification No- 11/2017 Central Tax Rate dated 28.06.2017
2. Transportation of goods by Pipeline taxable @ 12% under Serial No- 9(v) of the Notification No- 11/2017 Central Tax Rate dated 28.06.2017
3. Transport of goods in containers by rail by any person other than Indian Railways under Serial No- 9(iv) of of Notification No- 11/2017 Central Tax Rate dated 28.06.2017

Further in case of Multimodal transportation of goods, supply of service shall be taxable @ 12% with full credit of input tax. Multimodal Transportation means carriage of goods, by at least two different modes of transport from the place of acceptance of goods to the place of delivery of goods by a multimodal transporter

Transportation of Goods by conveyor belt shall be taxable @ 18% under Serial No- 9(vii) of Notification No- 11/2017 Central Tax Rate dated 28.06.2017 and as amended from time to time

TRANSPORTATION OF GOODS FROM PLACE OUTSIDE INIDA TO CUSTOM CLEARANCE STATION

By Aircraft

Services by way of transportation of goods by an aircraft from a place outside India upto the customs station of clearance in India is exempted under Serial No 19 of Notification No- 9/2017- Integrated Tax Rate dated 28.06.2017.

By Vessel

Services by way of transportation of goods by an vessel from a place outside India upto the customs station of clearance in India is chargeable to tax under Serial No- 1 of Notification No- 9/2017 – Integrated Tax Rate dated 28.06.2017.

Further vide corrigendum dated 30.06.2017- Where the value of taxable service provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India is not available with the person liable for paying integrated tax, the same shall be deemed to be 10 % of the CIF value (sum of cost, insurance and freight) of imported goods.

Hon'ble Gujarat High Court in a Writ Petition filed by Mohit Minerals Limited under Article 226 of the Constitution- The impugned Notification No.8/2017 – Integrated Tax (Rate) dated 28th June 2017 and the Entry 10 of the Notification No.10/2017 – Integrated Tax (Rate) dated 28th June 2017 are declared as ultra vires the Integrated Goods and Services Tax Act, 2017, as they lack legislative competency. In view of the said judgment there will be no tax under reverse charge for the goods imported on CIF basis.

TRANSPORTATION OF GOODS TO A PLACE OUTSIDE INDIA FROM CUSTOMS STATION

Services by way of transportation of goods by an aircraft from customs station of clearance in India to a place outside India is exempted under Serial No 19A of Notification No- 9/2017 Integrated Tax Rate dated 28.06.2017. However Nothing contained in this serial number shall apply after the 30th day of September, [2020]

Services by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India is exempted under Serial No 19A of Notification No- 9/2017 Integrated Tax Rate dated 28.06.2017. However Nothing contained in this serial number shall apply after the 30th day of September, [2020]

EXEMPTION FOR TRANSPORTATION OF CERTAIN GOODS BY RAIL OR VESSEL

Services by way of transportation by rail or a vessel from one place in India to another of the following goods under Serial No- 20 of Notification No- 9/2017 Integrated Tax Rate dated 28.06.2017

1. relief materials meant for victims of natural or man-made, disasters, calamities, accidents or mishap
2. defence or military equipments
3. newspaper or magazines registered with the Registrar of Newspapers
4. railway equipments or materials
5. agricultural produce
6. milk, salt and food grain including flours, pulses and rice; and
7. organic manure

RENTING OF TRANSPORT VEHICLES WITH OPERATOR- SAC 9966

Renting of Transport Vehicle with operator shall be taxable as under Serial No- 10(iii) of Notification No- 11/2017 dated 28.06.2017 at a central tax rate of 9%. Equivalent tax rate has been prescribed under the State/ Union Territory tax laws.

RENTING OF TRANSPORT VEHICLES WITHOUT OPERATOR- SAC 9973

Renting of Transport Vehicle without operator shall be taxable as under Serial No- 17(viia) of Notification No- 11/2017 dated 28.06.2017 at a central tax rate same as that of goods. Equivalent tax rate has been prescribed under the State/ Union Territory tax laws.