2019 (11) TMI 532 - AAR - GST

Rate of GST - transportation services by Goods Transport Agency (GTA) by road under RCM - coal beneficiation and loading charges - Rate of GST. HELD THAT - Both the services are independent of each other. The price charged by the supplier for both the services are separately mentioned in price bid invited by the company and none of the services can be considered as predominant over the other service. Both the services are important for the company and the company has invited tender for availing both the services. The coal beneficiation services fall under the purview of SAC 9997 and is chargeable at the rate of 18% GST - the Transportation services fall under the SAC 9965 and is chargeable to tax @12% but if supplier does not avail Input tax credit the GST Rate would be 5%.

Summary

Issues: Classification of GST rates for transportation services and coal beneficiation services under the GST Law.

Classification of Services:
The case involved a query regarding the classification of GST rates for transportation services and coal beneficiation services under the GST Law. The applicant, a power generating company, sought clarification on whether charging GST at 5% on transportation services by a Goods Transport Agency (GTA) and 18% on coal beneficiation and loading charges complied with the GST Law.

Applicable GST Rates:
The concerned officer opined that coal beneficiation and transportation of coal are distinct services attracting individual rates of 18% and 12%, respectively. However, if the transporter does not avail input tax credit, the applicable rate would be 5%. In case the company is liable to pay tax under Reverse Charge Mechanism, the GST rate would also be 5%.

Submissions and Arguments:
During the personal hearing, the applicant's representatives reiterated that the services of transportation and coal beneficiation were separate and did not constitute a composite or mixed supply under the CGST Act. They highlighted that the tender document clearly specified separate prices for each service, indicating their independent nature.

Authority's Findings:
The Authority carefully considered the submissions and found that both services were independent of each other, with separate pricing mentioned in the tender document. As neither service could be deemed predominant, they were to be taxed individually. Accordingly, coal beneficiation services were classified under SAC 9997, attracting an 18% GST rate, while transportation services fell under SAC 9965, with a 12% GST rate applicable unless the supplier did not avail input tax credit, in which case the rate would be 5%.

Ruling:
The Authority ruled that coal beneficiation and transportation services were distinct supplies attracting GST rates of 18% and 12%, respectively. The ruling was deemed valid subject to the provisions of the GST Act until declared void under the relevant sections.

This detailed analysis of the judgment provides insights into the classification of services and the applicable GST rates for transportation and coal beneficiation services under the GST Law.