2021 (1) TMI 497 - AAR - GST

Exemption from GST - service of transportation of goods from Magdalla Port, Surat to its General Lighterage Area of Magdalla Port (where the Mother Vessels are anchored) or vice versa - transportation of goods on other waterway of any inland water defined in clause(b) of Section 2 of the Inland Vessels Act, 1917 - Clause (b) of Entry No.18 of the Notification No.12/2017-Central Tax (Rate) dated 28th June, 2017 - Whether the service of above transportation fall within area as defined in Inland waterways ? HELD THAT - The 1st category of the term inland water comprises of any canal, river, lake or other navigable water within a state , as mentioned herein above. According to this, waterways on any canal, river, lake or other navigable water within a state, will be a part of Other waterway on any inland water - 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 inland waterway falling within the state, appears to be incorrect. 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 Vessels Act, 1917. It is that 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 Vessels 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, Surat to its General Lighterage Area qualifies for exemption from GST under the definition of inland waterways.
2. Whether the service of transportation falls within the area defined as 'Inland waterways.'

Analysis:
Issue 1:
The applicant claimed exemption from GST under Entry No.18 of Notification No.12/2017-Central Tax (Rate) for transportation of goods by inland waterways. The applicant argued that the transportation route between Magdalla Port and its General Lighterage Area falls within the state of Gujarat and should be exempt from GST. The definition of 'inland waterways' includes national waterways and other waterways on inland water as per the relevant Acts. The National Waterways Act, 2016 declared certain waterways as national waterways, but the General Lighterage Area of Magdalla Port did not fall within these limits. The service provided by the applicant did not meet the criteria of 'other waterway on any inland water' as defined under the Inland Vessels Act, 1917. Therefore, the transportation service did not qualify for the GST exemption under the specified notification.

Issue 2:
The definition of 'inland waterways' was crucial in determining the eligibility for GST exemption. The applicant's service of transporting goods between Magdalla Port and its General Lighterage Area was assessed against the definitions provided in the relevant Acts. The analysis revealed that the transportation route was part of the Arabian Sea and did not fall within the definition of 'other waterway on any inland water' as specified in the Inland Vessels Act, 1917. As the service did not meet the criteria of either 'national waterways' or 'other waterway on any inland water,' it was concluded that the transportation did not qualify for exemption under the Notification No. 12/2017-Central Tax (Rate). The ruling stated that the service did not fall within the state of Gujarat or the definition of 'Inland waterways,' thereby not meeting the conditions for GST exemption.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the reasoning behind the ruling delivered by the Authority for Advance Ruling, Gujarat.