2020 (6) TMI 520 - AAR - GST

Classification of services - GTA services for RCM - person unregistered with GST, providing road transport services by his own truck - issuance of E-way bill by or to road transporter who is unregistered with GST, providing road transport services by his own truck - to be treated as consignment note for GST-RCM purposes - person unregistered with GST providing road transport services by hiring trucks from third party, to applicant - issuance of E-way bill by or to road transporter who is unregistered with GST providing road transport services by hiring trucks from third party - to be treated as consignment note for GST-RCM purposes. HELD THAT - The concept of Mechanism (in short 'RCM) is incorporated under UM wherein the Government has notified not only supply of certain services but also supply of certain goods under RCM. Under RCM the liability to pay tax is fixed on the recipient of supply of goods or set vices instead of the supplier or provider - As per the provisions of section 9(3) of Act, the Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both A list of goods on which GST is payable under section 9(3) of the Act is given in the Notification No. 4/2017-Central Tax (Rate) dated 28.06.2017 and the category of services on which tax is payable is enumerated in the Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017. On perusal of Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017, the services rendered by the 'Goods Transport Agency in short (GTA) falls under 'Reverse Charge Mechanism'. The services provided by GTA in respect of transport of goods by road is a taxable event. As per Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, ''goods transport agency means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called - consignment note' has not been defined in the Act or in the Notification either. In this context we take the help of Explanation to Rule 4B of Service Tax Rules, 1994 wherein the ''consignment note' has been defined as a document provided by a goods transport agency against the receipt of goods for the transport of goods by roadways in a goods carriage. Form 2.1 may be treated as consignment note, thus the condition of OTA is fulfilled and thus the services procured from unregistered person for transportation of goods full under the definition of OTA and the applicant is liable to pay GST on the same under ROM.

Summary

Issues Involved:
1. Whether a person, unregistered with GST, providing road transport services by his own truck qualifies as GTA for RCM under GST.
2. Whether issuance of E-way bill, Form 2.1 & 3.3 by or to an unregistered road transporter providing road transport services by his own truck is treated as a consignment note for GST-RCM purposes.
3. Whether a person, unregistered with GST, providing road transport services by hiring trucks from third parties, qualifies as GTA for RCM under GST.
4. Whether issuance of E-way bill, Form 2.1 & 3.3 by or to an unregistered road transporter providing road transport services by hiring trucks from third parties is treated as a consignment note for GST-RCM purposes.

Detailed Analysis:

1. Unregistered Person Providing Road Transport Services by Own Truck:
The applicant sought clarification on whether a person unregistered with GST, providing road transport services using their own truck, falls under the definition of Goods Transport Agency (GTA) and is subject to Reverse Charge Mechanism (RCM). The ruling clarified that services provided by GTA, as defined in Notification No. 11/2017-Central Tax (Rate), include any person providing transport services and issuing a consignment note. The applicant's practice of issuing Form 2.1, which includes details like material, vehicle number, and driver information, was considered equivalent to a consignment note. Therefore, such services fall under the definition of GTA and are subject to RCM under Notification No. 13/2017-Central Tax (Rate).

2. Issuance of E-way Bill, Form 2.1 & 3.3 by/to Unregistered Transporter:
The applicant queried if the issuance of E-way bill, Form 2.1, and Form 3.3 by or to an unregistered road transporter is treated as a consignment note for GST-RCM purposes. The ruling found that the applicant's Form 2.1, which contains necessary details for transporting goods, serves the purpose of a consignment note as per the explanation to Rule 4B of the Service Tax Rules, 1994. This form, combined with Form 3.3, which confirms delivery, fulfills the requirement of a consignment note, thereby satisfying the conditions for GTA services under RCM.

3. Unregistered Person Hiring Trucks from Third Parties:
The applicant also sought clarification on whether a person unregistered with GST, who provides road transport services by hiring trucks from third parties, qualifies as GTA for RCM purposes. The ruling applied the same principles as in the first issue. Since the applicant issues Form 2.1 and the transporter is responsible for the safe delivery of goods, the service qualifies as GTA under the same notifications and is subject to RCM.

4. Issuance of E-way Bill, Form 2.1 & 3.3 by/to Unregistered Transporter Hiring Trucks:
The final query was whether the issuance of E-way bill, Form 2.1, and Form 3.3 by or to an unregistered transporter hiring trucks from third parties is treated as a consignment note for GST-RCM purposes. The ruling reiterated that Form 2.1, which includes all necessary details and is used in conjunction with Form 3.3, qualifies as a consignment note. This ensures that the services provided by such transporters fall under the definition of GTA and are subject to RCM.

Conclusion:
The ruling concluded that services received from unregistered transporters by the applicant fall under the definition of GTA services as per Notification No. 11/2017-Central Tax (Rate) and are covered under RCM as per Notification No. 13/2017-Central Tax (Rate). Form 2.1 issued by the applicant can be considered a consignment note, fulfilling the necessary conditions for GTA services under GST.