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TMI Blog2022 (2) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... as the 'State Transport undertaking'. The ruling of the AAR upheld. - AAAR/AP/04(GST)/2022 - - - Dated:- 24-1-2022 - SRI SURESH KISHNANI AND SRI S. RAVI SHANKAR NARAYAN MEMBER Authorized Representative : Shri G. Rama Krishna Raju Yadav, Joint Commissioner of Central Tax, Guntur CGST Commissionerate, (Under Section 101 of the Central Goods and Service Tax Act and the Andhra Pradesh Goods and Service Tax Act). The Principal Commissioner, Central Tax, Guntur CGST Commissionerate (hereinafter referred to as appellant) filed an appeal in case of M/s. Andhra Pradesh State Road Transport Corporation (APSRTC), Pandit Nehru Bus Station, RTC House, Floor, Bhaskar Rao Pet, Vijayawada as per Rule 106 (2) of CGST Rules, 2017 against the Advance Ruling issued under sub-section (6) of section 98 in FORM GST ARA-03 and no fee shall be payable by the appellant for filing the appeal. The appeal dated: 08.11.2021 is filed contending the Ruling passed by the Authority for Advance Ruling, A.P vide Ruling AAR No.25/AP/GST/2021 dated 20.07.2021. 1. Background of the Case: 1.1 The appellant i.e., Principal Commissioner Central Tax Guntur CGST Commissionerate filed an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR No.25/AP/GST/2021 dated 20.07.2021 held: The transaction of hiring/leasing of buses by the APSRTC to the Public Transport Division (PTD) of Government of Andhra Pradesh is eligible for the exemption under Entry 22 of Notification No 12/2017 Central Tax (Rate). 2. Grounds of Appeal: 2.1 The appellant states that M/s. Andhra Pradesh State Road Transport Corporation, (APSRTC) declared their nature of business activities as 'Leasing business, service Provision, Recipient Goods or Services, others, works Contract, Office /Sale Office, Supplier of Services and warehouse/Depot', in the 'Registration Certificate', while it is declared as the activity of 'undertake to provide the public transport' in ARA-01 Application in front of the Authority for Advance Ruling. 2.2 As per Entry No.22 of Notification No. 12/2017 Central Tax (Rate) State transport undertaking has the same meaning as assigned to it in clause (42) of Section 2 of the Motor Vehicles Act, 1988 (59 of 1988). Section 2 (42) of Motor Vehicles Act, 1988: 'State Transport undertaking' means any under taking providing road transport service, where such undertaking is ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-Central Tax (rate) are not made applicable to this case as the service extended by APSRTC to PTD does not fall under category of 'services' as prescribed in the said notification. 2.4 Whereas, the AAR considered the hire services provided by APSRTC to the 'Public Transport Department' (PTD) which will operate under the Administrative control of Transport, Road and Building Department, Government of Andhra Pradesh as 'services' by the way of giving on hire to a State Transport Undertaking'. Further the AAR also considered the Public Transport Department (PTD) as 'undertaking' meant for the transport carried by the State Government relied upon definition available in Companies Act, 1962. 2.5 Whereas, the notification prescribes only 'state transport undertaking' and the definition of 'state transport undertaking' is defined in Motor Vehicles Act, 1988. When there is a clear definition available, relying upon any other definitions will not be tenable. It is pertinent to mention that a taxing statute has to be interpreted in the light of what is clearly expressed. Therefore, the AAR's ruling that the Public Transport Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to any lease agreement. This fact was informed by the APSRTC vide their letter dated 08.12.2021 addressed to the Assistant Commissioner of Central Tax, Amaravathi CGST Division, Vijayawada. Thus, there is no lease agreement between APSTRC and PTD in this matter. In the absence of lease agreement, the classification of the service, its tax liability and eligibility for the exemption, if any, under Entry 22 of Notification No. 12/2017 Central Tax (rate), can't be done. It appears that merely based on the question raised by the APSRTC, the AAR given the ruling vide AAR No.25/AP/GST/2021 dated 20.07.2021 without going through the basic facts in this case. Therefore, it is not legally tenable and needs to be set aside. 5. Additional submissions filed by M/s APSRTC: 5.1 It is contented by the Central GST authorities that the benefit sought to be extended under the notification 12/2017 is in relation to a State Transport Undertaking and when the State Government, i.e., Public Transport Department takes on hire the benefit cannot be extended as the State government is not an 'undertaking'. In this regard, it is reiterated by M/s APSRTC, that the term 'state Trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ides the above and with prejudice to the above argument, it is further submitted that 'undertaking' denotes an activity but not any legal entity or a physical form. There is no such legal requirement. The words 'unit', 'undertaking', and 'office' derive their meaning from the functional activities that are performed, but need not indicate any physical structure or a legal identity as such. It is finally prayed by the tax payer to extend the due relief extended by AAR. 6. Discussion and Findings: We have gone through the records of the appeal, facts of the case, and also considered the written and oral submissions made at length by the appellant and the party in dispute, M/s. Andhra Pradesh State Road Transport Corporation (APSRTC), as well, in light of the ruling pronounced by the AAR. On perusal of the information at hand, it is observed that the main issue of contention is whether the transaction of hiring/leasing of buses by the APSRTC to the Public Transport Division (PTD) of Government of Andhra Pradesh is eligible for the exemption under Entry 22 of Notification No 12/2017 Central Tax (Rate). The AAR has taken the stance that the act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended by the appellant that the benefit extended under the notification No.12/ 20.17 Central Tax (Rate) Dated:28.06.2017 is in relation to a 'State Transport undertaking' and when the PTD takes on hire, the benefit cannot be extended as it is a Government Department and not an undertaking. In the instant case, the term 'State Transport undertaking' is defined in the very same notification 12/2017 itself,' and it is presented as under: a. As per definitions 2 (zzk) of notification No. 12/2017 state transport undertaking has the same meaning as assigned to it in clause 142) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988) Hence, the meaning of the words 'State Transport undertaking' shall mandatorily be drawn from the Motor vehicles Act,1988. b. Section 2 (42) of Motor Vehicles Act, 1988 defines State Transport undertaking State transport undertaking means any undertaking providing road transport service, where such undertaking is carried on by,-- (i) the Central Government or a State Government; (ii) any Road transport Corporation established under section 3 of the Road Transport Corporations Act, 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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