2020 (6) TMI 544 - AAR - GST

Exemption from Service Tax - business of providing services in relation to transportation of goods from Magdalla Port to the General Lighterage Area (Anchoring Point of Mother Vessel) or vice versa - covered under exemption contained at Sr. No. 18 of Notification No. 12/2017Central Tax (Rate) or not - covered in the definition of Inland waterways - HELD THAT - The applicant is providing service relating to transportation of goods in the water way, i.e. from Magdalla Port to its General Lighterage Area (Anchoring Point of Mother Vessel) or vice versa. This waterway is a part of the Arabian Sea. Whereas, the term Other waterway on any inland water covers any canal, river, lake or other navigable water within a State only. The length of the waterway, between which the service of transport is performed by the applicant, is the part of the Arabian Sea and not a part of any canal, river, lake or other navigable water within a State. Thus, their contention, that the transportation is being done on the River Tapi, appears to be incorrect. As regard the contention that the entire activity is being done by them under territorial water only, it is worthwhile to mention that the Arbian Sea is not a part of the State of Gujarat and, hence, not covered under the term Other waterway on any inland water so as to be eligible for exemption of the Services by way of transportation of goods by inland waterway - the service of transportation of goods in barrages from mother vessel to daughter vessel from Magdalla Port, Surat to its General Lighterage Area of Magdalla Port does not get covered in the definition of other waterway on any inland water , as defined under Clause (b) of Section 2 of the Inland Vessel Act, 1917. Thus, the service of transportation of goods in barrages from mother vessel to daughter vessel from Magdalla Port, Surat to its General Lighterage Area of Magdalla Port is neither covered in the definition of national waterways , as defined in Clause (h) of section 2 of the Inland Water Ways Authority of India Act, 1985 nor covered in the definition of other waterway on any inland water , as defined under Clause (b) of Section 2 of the Inland Vessel Act, 1917. Consequently, the same does not qualify for exemption contained at Sr. No. 18 of the Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017.

Summary

Issues:
1. Whether the service of transportation of goods from Magdalla Port to its General Lighterage Area is exempt under Notification No. 12/2017-Central Tax (Rate)?
2. Whether the above transportation service falls within the definition of 'Inland waterways'?

Analysis:
1. The applicant claimed exemption under Entry No. 18 of Notification No. 12/2017-Central Tax (Rate) for transporting goods by inland waterways. The definition of 'inland waterways' includes national waterways and other waterways on inland water. The National Waterways Act, 2016 declares certain waterways as national waterways. The General Lighterage Area of Magdalla Port does not fall within the declared National Waterway 100-Tapi River, indicating the service does not qualify as an inland waterway service.

2. The definition of 'Other waterway on any inland water' under the Inland Vessel Act, 1917 includes canals, rivers, lakes, or navigable waters within a state. The transportation route provided by the applicant is part of the Arabian Sea, not within a state's canal, river, or lake. Thus, the service does not meet the criteria for 'Other waterway on any inland water'. The transportation activity in question is not eligible for exemption under the definition of inland waterways.

Conclusion:
The Authority ruled that the transportation service from Magdalla Port to its General Lighterage Area does not qualify for exemption under Notification No. 12/2017-Central Tax (Rate) as it does not meet the criteria for 'inland waterways'. The service route being part of the Arabian Sea does not fall under the definition of 'Other waterway on any inland water'. Therefore, the service of transporting goods in this scenario does not satisfy the conditions for exemption as per the relevant notifications.