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TMI Blog2020 (9) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... d, Mumbai-400009 (herein after referred to as "the Appellant") against the Advance Ruling No. GST-ARA-39/2019-20/B-24 dated 05.03.2020 = 2020 (7) TMI 49 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA, passed by the Maharashtra Authority for Advance Ruling (MAAR). BRIEF FACTS OF THE CASE 3.1 The Appellant is the owner of various goods transport vehicles. They have registered themselves as Goods Transport Agency (GTA) under the CGST Act, 2017, and have classified their services under SAC 996791 bearing the description "Goods transport agency services for road transport", in terms of the Annexure to the Notification No. 11/2017-C.T. (Rate), dated 28.06.2017. Earlier, they had opted for the payment of 5% GST, payable by the recipient of the GTA Services under Reverse Charge Mechanism in terms of the Notification No. 11/2017-C.T. (Rate), dated 28.06.2017 read with the Notification No. 13/2017 - C.T. (Rate) dated 28.06.2017. Under the aforesaid arrangement, the Appellant was not eligible to avail credit of input tax charged on goods or services or both used by the Appellant for supplying the said services of GTA. 3.2 The Appellant now wants to change the current option of 5% GST, payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or irregularity in the same. 3.7 The Appellant wanted to know whether the Appellant could also act as a 'GTA' in the aforementioned arrangement, in terms of Notification No. 20/2017-Central Tax (Rate), dated 22.08.2017, and could issue consignment notes and charge GST at the rate of 12% on forward charge basis, when M/s. Posco ISDC Pvt. Ltd would already be acting as a GTA and would be issuing consignment notes in terms of the same notification, although it would mean that there would be two GTAs in a single transportation of goods, with two consignment notes for the transportation activity of the same goods. 3.8 Accordingly, the Appellant had filed an application for Advance Ruling with the Maharashtra Authority for Advance Ruling raising the following questions: (i.) Considering the nature of transaction, under the new proposition where Liberty Translines the Appellant would be issuing the consignment note to M/s. Posco ISDC Pvt. Ltd.in addition to the consignment note, issued by M/s. Posco ISDC Pvt. Ltd. to their clients, whether the services, rendered by the Applicant to Mils. Posco ISDC Pvt. Ltd. as a sub-contractor, would be classified as GTA service (SAC 996791), when t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be availing the services of the Applicant by way of hiring the transport vehicles, belonging to the Applicant. The Maharashtra ARA also stressed that the E-way bill, in this proposed transaction, was being issued by M/s. Posco ISDC Pvt. Ltd., and not by the Applicant, which dealt, reveals that the actual transportation of the goods is being carried out by the M/s. Posco ISDC Pvt. Ltd. with the aid of the transport vehicles owned by the Applicant. Thus, M/s. Posco ISDC Pvt. Ltd would be the actual GTA. Hence, the services supplied by the Applicant, where they are supplying the transport vehicles to M/s. Posco ISDC Pvt. Ltd., would not be classified as GTA services. Instead their services would be classified as hiring out of transport vehicles. (b) As regards the question (ii) asked by the Appellant, the Maharashtra Advance Ruling Authority held that since the Appellant could not act as GTA in the proposed transaction, they were not entitled to charge 12 % GST on the forward charge basis, in terms of the Notification No. 20/2017-C.T. (Rate), dated 22.08.2017. (c) As regards the question (iii) asked by the Appellant, the Maharashtra Advance Ruling Authority held that since this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Authority failed to appreciate that a GTA has been defined with reference to the entity' and not with reference to 'a transaction'. As such, a person who has issued a consignment note even for one transaction, must be treated as a GTA for all other transactions. 4.10 The Advance Ruling Authority failed to appreciate that the concept of Non-GTA transportation SAC 996511, applies only to small transport operators and not to fleet owners, as in this case. 4.1 1 The Advance Ruling Authority erred in holding that it is not permitted to have two consignment notes for the same transportation of goods and failed to appreciate that two consignment notes for the same transportation of goods are perfectly logical, legal and permitted. 4.12 The Advance Ruling Authority failed to appreciate that the common principle of law that something which is not forbidden is permitted, as per the doctrine of 'Nulla poena sine lege'. 4.13 The Ruling is not in accordance with law, in particular, Explanation to Section 16 (2) of the CGST Act, 2017, which was specifically amended w.e.f. 30.8.2018 to cover 'Bill To Ship To' concept in respect of services. 4.14 The Advance Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sona] hearing, Shri Chaudhari submitted a synopsis of the arguments and reiterated the points made therein. He also produced copies of case laws pronounced by AAR. Rajasthan and Uttarakhand to support their contention. The main points mentioned in the synopsis, submitted by Shri Chaudhari, are as under: (a) The subject transaction is a case of bailment or sub-bailment under the Indian Contract Act, 1872. The Appellant is a bailee and has lien over goods transported; (b) The Carriage by Road Act, 2007 mandates the issuance of Goods Receipt Note, known as Lorry Receipt, which is same thing as the Consignment Note under the GST Law; (c) The fact that the main contractor does not accept the L.R. is not material for the classification of the service. The conclusion is that the Appellant is a 'Goods Transport Agent' under GST law; (d) Reference has been made to the Advance Ruling pronounced by the Uttarakhand Advance Ruling Authority in the application filed by M/s. Uttarakhand Forest Development Corporation = 2020 (6) TMI 520 - AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND, wherein it has been held that purpose of consignment note is to indicate that lien has been transferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, as regards the question asked by the Appellant as to whether it is procedurally correct to have two GTAs issuing two consignment notes at the same time in the single goods transportation activities, the Maharashtra Advance Ruling Authority held that the said question is not covered under the set of the questions specified under section 97(2) of the CGST Act. 2017, in respect of which the clarifications can be sought under the Advance Ruling, therefore, they do not have jurisdiction to pass any ruling in this matter. 8. Having gone through the above appeal, and the rulings of the Maharashtra Advance Ruling Authority (MAAR) on the questions raised by the Appellant, the moot issue, before us, is whether the Appellant can act as GTA in the subject transaction. To decide this issue, we would first explore the meaning of GTA under the CGST Act, 2017. The meaning of GTA has been provided under the explanation to the Heading 9967 of the Notification No. 11/2017-C.T. (Rate), dated 28.06.2017 amended by Notification No. 20/2017-C.T. (Rate), dated 22.08.2017, which is being reproduced herein under: Explanation- "goods transport agency" means any person who provides service in relation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Rule 138 of the CGST Rules, 2017, which provides for the E-way bill mechanism. This rule clearly states that where the goods are handed over to the transporter for transportation by road, in such case, the transporter shall generate the E-way bill. Since, in the subject case, it is M/s. Posco ISDC Pvt. Ltd. who would be generating the E-way bill prior to the movement of goods by road, therefore, M/s. Posco ISDC Pvt. Ltd. would be the actual transporter. Now, once the identity of the transporter is revealed, which in the subject case is M/s. Posco ISDC Pvt. Ltd., the contention of the Appellant that they would also be acting as GTA in the proposed arrangement is not sustainable. In a single transaction of transportation of goods, as consignment note is an evidence of custody of goods taken from owner of the goods and the privity of contract exists between the owner of goods and the GTA, and thus, it is the GTA, which issues the consignment note. Now, coming to the activities carried out by the Appellant, it is observed that the Appellant is simply hiring out their transport vehicles to M/s. Posco ISDC Pvt. Ltd. for a consideration, hence, their services would be classified un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is observed that the ruling, passed by the MAAR, is in the context of the proposed arrangement propounded by the Appellant for the purpose of seeking Advance Ruling in the matter, where the Maharashtra AAR held that the activities carried out by the Appellant in the subject transaction, as discussed above, are not those of GTA. The Advance Ruling order does not debar the Appellant from acting as GTA in other transactions, where they enter into transport contract with the consignor or consignee directly. 13. As regards the questions (iii) and (iv) asked by the Appellant, we concur with the Rulings passed by the MAAR, wherein the Authority held that the question (iii) raised by the Appellant, which is regarding the admissibility of LTC to M/s. Posco ISDC Pvt. Ltd., is not concerned with them, accordingly, it has been held by the MAAR that they are not the proper person to ask the said question. 14. As regards the question (iv), the MAAR has held that they do not have the jurisdiction to pass ruling on this question, as the said question, as to whether it is procedurally correct to have GTA issuing two consignment notes in the single transportation of the goods, is not covered und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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