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TMI Blog2020 (7) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... ISDC Pvt. Ltd. as the main contractor, is already classified as GTA service (SAC 996791) and is going to remain unchanged ? 2. Whether the Applicant would be right in charging GST @12% under Forward Charge mechanism to POSCO ISDC Pvt. Ltd. in terms of Notification No. 20/2017-Central Tax (Rate) dated 22 August 2017 when POSCO ISDC Pvt. Ltd. as the main contractor, is already charging GST @12% under the same Notification, which is going to remain unchanged? 3. Whether POSCO ISDC Pvt. Ltd. would be eligible to claim credit of the 12% GST charged by the Applicant in its invoice under Forward charge mechanism? 4. Procedurally, is it correct to have two GTA Service Providers and two consignment notes for the same movement of goods, one issued by the Applicant as a sub-contractor and the other by POSCO ISDC Pvt. Ltd. as the main contractor? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST laws and there is no impediment or irregularity in the same. 2.9 Hence, the query is whether the Applicant can also act as a 'GTA' in terms of Notification No. 20/2017 C.T. (Rate) dated 22.08.2017, and can issue consignment notes and charge GST at 12% under forward charge, when POSCO is already acting as GTA and issuing consignment notes in terms of the same notification, although it will mean that there will be two GTAs in a single transportation of goods, issuing two consignment notes for the same goods/transportation activity. 2.10 Applicant made further submissions on 28.11.2019 as under:- 2.10.1 Main Contractor is POSCO, a GTA and the applicant, the sub-contractor, is also a GTA. 2.10.2 Non preparation of consignment note does not make an otherwise GTA service, go out of the classification of GTA and claim exemption for rendering non GTA transportation service. When the entire service is subcontracted, the classification of the sub contracted service remains the same as that of the original contractor. 2.10.3 Legally, there can never be a situation where a transporter does not issue a consignment note in view of the 'Carriage By Road Act', which requires a common car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that the main contractor does not own the vehicle used for rendering GTA service and appoints a sub-contractor to carry out the work on his behalf, does not to go against the concept of GTA at all. The main contractor continues to be GTA at all times, whether the transportation happens in the truck owned by himself or by his sub-contractor. Thus in the present case POSCO, the main contractor has to be treated as GTA and the service rendered by POSCO is GTA service. 2.12 Applicant is a commercial concern which provides service in relation to transport of goods by road and issues consignment note and hence fits the definition of GTA. Applicant is registered under GST Act as GTA and is providing GTA Service to its clients, one of which is going to be POSCO. The classification of service as GTA service has been accepted by all the customers of Liberty Translines as well vs the Department. The only difference that is going to happen in future is that Applicant wants to opt for forward charge mechanism in place of reverse charge mechanism. Simply because the charging mechanism is changed, the service classification cannot be different from the earlier one. 2.13 While determining the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice only. There will not be two separate services. 2.15 Ruling No 17/2018-19, Dated Jan 30, 2019 of the Uttarakhand Advance Ruling Authority = 2019 (3) TMI 837 - AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND is cited wherein benefit of exemption and reduced rate available to the main contractor of Government jobs was granted to the sub-contractor also. Hence it is clear that there can be no difference in classification of service provided by the main contractor and sub-contractor. 2.16 The Carriage By Road Act, 2007 / ACT NO. 41 OF 2007 requires a common carrier to compulsorily issue a Goods Receipt. The Lorry Receipts issued by the transporters are in compliance of this legal requirement. It may be noted that there is no difference between a lorry receipt and a consignment note envisaged under GST Act. In fact, courts have held that a lorry receipt is nothing but a consignment note for the purpose of Service Tax. Therefore, there can never be a situation where a transporter does not issue a consignment note. If any transporter does not issue a consignment note, he would be violating the provisions of The Carriage By Road Act, 2007. In practice, what the sub-contractors do is to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of goods by road in a goods carriage is wholly exempted under section 93 of the Act, the goods transport agency shall not be required to issue the consignment note Ito the recipient of service]. Explanation. - For the purposes of this rule and the second proviso to rule 4A, "consignment note" means a document, issued by a goods transport agency against the receipt of goods for the purpose of transport of goods by road in a goods carriage, which is serially numbered, and contains the name of the consignor and consignee, registration number of the goods carriage in which the goods are transported, details of the goods transported, details of the place of origin and destination, person liable for paying service tax whether consignor, consignee or the goods transport agency. 03. CONTENTION- AS PER THE JURISDICTIONAL OFFICER: The submissions made by the jurisdictional officer is as under:- 3.1 Applicant issues consignment notes during execution of the service of transportation of goods and has opted for 5% GST payable by the recipient under reverse charge mechanism and therefore the applicant does not claim ITC. Applicant now wants to pay 12 % GST under forward charge. 3.2 Appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even they can issue a consignment note (as a GTA) to M/s POSCO ISDC Pvt. Ltd (POSCO) for the same transportation of goods by road, happening in the same vehicle belonging to the Applicant for which E-way bill will be prepared by POSCO only. 5.3.2 We also observe that the service of transportation of goods is sub-contracted to the applicant by POSCO. Thus effectively it appears that, the contract to undertake transportation of goods is given by the consignee/consignor to POSCO and not to the applicant. The consignee/consignor may not be aware that the transportation will be done by the applicant. It is also possible that such sub-contract may/can also be given to some other party by POSCO. We find that, because POSCO deals with the consignee/consignor directly, they also issue E-way bills and also consignment notes. The role of the applicant is to just provide their vehicles to POSCO as and when called for and to this extent we are of the opinion that the applicant is giving only vehicles to POSCO and thus it is POSCO which has the transportation contract with the consignee/consignor. Thus we find that the transaction in this case would be one of hiring of vehicles and not that of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods transported, details of the place of origin and destination, person liable for paying service tax whether consignor, consignee or the goods transport agency" 5.3.6 Thus, the consignment note contains details of consigner/consignee, details of the place of origin and destination, details of the goods transported, etc. which are known only to POSCO, in the subject case. These details are then given to the applicant who arranges for vehicles to transport the goods. 5.3.7 As per Notification No. 11/2017-C.T. (Rate) dated 28.06.2017, "goods transport agency" or GTA means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. This means, while others might also hire out vehicles for goods transportation, only those issuing a consignment note are considered as a GTA. Thus, a consignment note is an essential. condition to be considered as a GTA. In the subject case, it is POSCO which has a contract for transportation of goods from the consignee/consignor. It will therefore be POSCO which is responsible for the safe delivery of goods to the consignee. POSCO has an arrangement with the applicant whereby the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide the second question mentioned above, the Applicant is actually asking whether they can charge GST @12% under Forward Charge mechanism as a GTA, in terms of Notification No 20/2017-C.T. (Rate) dated 22.08.2017. We have already held above that, in the subject case, applicant cannot issue another consignment note for the same goods and for the same transaction where consignment notes are already issued by POSCO. Hence the applicant, in respect of the subject transaction cane of be treated as a GTA and therefore cannot charge GST @12% under Forward Charge mechanism as a GTA, in terms of the said Notification No. 20/2017-C.T. (Rate) dated 22.08.2017. 5.5 The third question raised in the subject application is whether POSCO would be eligible to claim credit of the 12% GST charged by the Applicant in its invoice under Forward charge mechanism. The proper person to raise this question would be POSCO and not the applicant. We therefore refrain from answering this particular question. 5.6 The fourth question is whether it is procedurally correct to have two GTA Service Providers and two consignment notes for the same movement of goods, one issued by the Applicant as a sub-contractor an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. as the main contractor, is already classified as GTA service ( SAC 996791) and is going to remain unchanged ? Answer:- Answered in the negative in view of discussions made above. Question 2. Whether the Applicant would be right in charging GST @12% under Forward Carge mechanism to POSCO ISDC Pvt. Ltd. in terms of Notification No. 20/2017-C.T. (Rate) dated 22.08.2017 when POSCO ISDC Pvt. Ltd. as the main contractor, is already charging GST @12% under the same Notification, which is going to remain unchanged? Answer:- In view of answer to question no. 1 above, the Applicant cannot charge GST @12% under Forward Charge mechanism to POSCO, it,' terms of Notification No. 20/2017-C.T. (Rate) dated 22.08.2017 Question 3. Whether POSCO ISDC Pvt. Ltd. would be eligible to claim credit of the 12% GST charged by the Applicant in its invoice under Forward charge mechanism? Answer:- Not answered in view of discussions made above. Question 4. Procedurally, is it correct to have two GTA Service Providers and two consignment notes for the same movement of goods, one issued by the Applicant as a sub-contractor and the other by POSCO ISDC Pvt. Ltd. as the main contractor? Answer:- Not ans ..... X X X X Extracts X X X X X X X X Extracts X X X X
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