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TMI Blog2022 (6) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... HELD THAT:- The Serial no 1 to the Notification 13/ 2017-CT (R) dated 28-6-17 reads that the GST liability for supply of service by a GTA in respect of transportation of goods by road to a registered person shall be paid by the recipient of such services. We find M/s Vadilal liable to GST under RCM for the GTA service supplied to it. As per GST scheme of law, consignment note issuance, by whatever name called, is mandatory for a GTA. The issuance of consignment note indicates that the lien on goods has been transferred to the transporter and the transporter becomes responsible for the goods till its safe delivery to the consignee. This aspect is evident in the relationship between Vadilal and its GTA but is absent in the relationship between Vadilal and Celcius - the requirement of consignment note issuance by a GTA cannot be brushed aside - there are no merit to deem Vadilal as a GTA. Person liable to pay GST for transportation of goods of customer of Celcius (an independent agency engaged by Vadilal) - HELD THAT:- Vadilal has no locus standi, vide Section 95 CGST Act, to seek Ruling on the tax liability for a transaction entered between M/s Celcius and its (Celcius s) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransportation charges, which is for the round trip of the refrigerated vehicle i.e. for transporting Vadilal s goods to the concerned destination and for bringing back the vehicle after such delivery. Appropriate amount of GST is paid on the transportation charges for the round trip. 4. Vadilal submitted that since refrigerated vehicles ordinarily travel back without any goods being transported i.e. in empty condition; it has engaged a few agents/agencies who could locate customers whose goods could be transported in the empty refrigerated vehicles during their return journey. M/s. Celsius Logistic Solution Pvt. Ltd. has been appointed by Vadilal as a middle agency/agent for locating customers whose goods could be transported in the empty vehicles. If empty vehicles during their return journey are thus used for transporting goods of other customers, then some revenue could be generated by charging transportation expenses from such parties, which may result in additional revenue to Vadilal and reduction in overall cost to the organization. Appropriate amount of GST would however be paid on the transportation charges recovered from such customers who were located by agents/agencie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortation charges (i.e. freight) would be paid to them, and applicable GST liability on such transportation charges would also be discharged. 7. Question on which Advance Ruling sought: 1. Who is the person liable to pay GST for transportation of goods of customers located by an independent agency engaged by the applicant, while refrigerated vehicles used for transportation of the applicant s goods travelled back on return journey, after unloading and delivering the applicant s goods at the destination? 2. Who is the person liable to GST for transportation of goods of the customers located by an independent agency when the vehicles used for transportation of the applicant s goods are used for further transportation, after unloading the applicant s goods at the destination of the applicant s branches or depots? 3. Who is the person liable to pay GST in respect of goods transport agency service used for bringing back empty plastic trays belonging to the applicant from various places (like branches or depots) to the applicant s premises? 4. Whether the applicant can avail Input Tax Credit of the entire amount of GST paid on the transaction of the applicant s goods in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y (i.e. M/s. Celcius Logistics) in respect of transportation of the goods of the customers located by such agency. Like the invoices referred to above, the details of the customer (i.e. the owner of the goods), the description of the goods and the transportation charges recovered by the applicant by the middle agency would be shown with the GST payable thereon in such invoice. The middle agency would make payment of transportation charges so billed to Vadilal. Specimen bills/invoices that Vadilal would be raising in such cases on the middle agency (i.e. M/s. Celcius Logistics) are enclosed. (iv) In both the above transactions (i.e. transportation of goods of third party customers during return journey to Pundhra, and also for transportation of goods of third party customers from one place to another as discussed in para (5) above), the middle agency (i.e. Celcius Logistics) would raise their bills to the customers who are located by them, and whose goods are transported in the vehicle. Vadilal would not know the amounts charged by the middle agency from third party customers because that would be a transaction between the middle agency and the customers whose goods are transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not liable to pay GST only because any document like a consignment note was not issued by him. The tax is imposed for providing service in relation to transport of goods by road. (viii) In view of the above factual and legal position, the applicant submits that it would be the service provider in these transactions, but the liability to pay GST would be that of the independent agency who would be locating the customers, or the customers whose goods are actually transported by the applicant. Such transactions are of services by a goods transport agency (GTA) in respect of transportation of goods by road, classifiable under Service Code 9967, to which reverse charge method provided under Notification No.13/2017-CT (Rate) is applicable. 9. The applicant submits that for question/issue No.3, it is the applicant who is the person liable to pay GST on transportation charges for bringing back plastic trays through independent transporters/contractors. The applicant submitted as follows : (i) For bringing back empty plastic trays to its premises, independent goods transport operators would be employed, and therefore this transaction should be treated as transportation service by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on their bills. Specimen tax invoices issued by transporters registered with the GST Department and also specimen bills issued by transporters who are not registered persons, are enclosed. (ii) In these cases, transporters have charged the agreed transportation charges, which are the fixed rate for the round trip. Even though the vehicle like a refrigerated van may have to come back without transporting any goods during the return journey, the transporters actually charge for transportation service for the entire round trip; and no separate charges are agreed between the parties for transporting ice cream from the applicant s premises to the concerned location treating it as one side journey, and for return journey without any goods treating it as a separate return journey. The parties have treated the transaction as that of a round trip, and the transportation charges are agreed between the parties for the entire transaction; and therefore, the transportation charges billed by the transporters in this transaction is the value of taxable supply of goods transportation service , and the applicant is legally entitled to take ITC of GST paid on transportation charges for this t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round trip involving transportation and delivery of the applicant s goods to the concerned destination and for bringing back the empty vehicle. The scheme of Section 17 does not take into its sweep a case like the present one; because it is not legal nor permissible to suggest that the refrigerated vehicle travel back empty and therefore ITC of GST attributable to the value of return journey was inadmissible. The transaction of transportation of Ice cream by utilizing refrigerated vehicles is one composite service transaction, for a complete round trip, and therefore ITC of entire GST paid on value of such round trip transaction is legally admissible to the applicant. Personal Hearing: 11. Virtual hearing, on 5-5-22, was attended by Shri Amal Dave, Advocate and he reiterated the submission. Revenue s Submission 12. Revenue neither submitted its comments nor appeared for the hearing. Findings 13. At the outset we would like to make it clear that the provisions of CGST Act and GGST Act are in parimateria and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom Vadilal, pays the consideration, as per invoices raised on it. In this way, Vadilal intends to generate additional revenue. vi. We find that Vadilal provides service to Celcius, enabling Celcius to carry on its ( Celcius) business of transportating the goods belonging to its (Celcius) customers. What is forthcoming from the agreement is that Vadilal is supporting the business of Celcius and that Celcius is utilizing the services provided by Vadilal in furtherance of its (Celcius) business. This specific activity of Vadilal falls under the category of Business Support Service supply to Celcius. We find that Vadilal is supporting and facilitating the business of M/s Celcius and enabling Celcius to transport its potential customers goods to the customers desired destination. We hold that Vadilal is supplying Business Support Services to M/s Celcius. vii. We dismiss the applicant s view that it is a GTA for the following reasons: a. Vadilal is supplying Business Support Service to Celcius, and charging consideration from Celcius for the service supplied. b. The lien of goods of customers of Celcius is not transferred to Vadilal and Vadilal is not responsible for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Who is liable to pay GST for transportation of goods of customer of Celcius (an independent agency engaged by Vadilal). We hold that Vadilal has no locus standi, vide Section 95 CGST Act, to seek Ruling on the tax liability for a transaction entered between M/s Celcius and its (Celcius s) customers, wherein Celicus is the service provider and its customers are the service recipient. We refer to Section 103(1) CGST Act, which reads that Advance Ruling shall be binding only on the applicant who had sought it and on the concerned officer/ jurisdictional officer in respect of the applicant. In this case, our Ruling is binding on the Vadilal. This subject Ruling, vide Section 103(1) CGST Act is not binding on Celcius and its service recipients. Further, Section 95(a) CGST Act defines advance ruling as a decision provided in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. We find that subject Ruling is sought by M/s Vadilal and not M/s Celcius/ Celcius s customers. 19. In conspectus of aforementioned Discussion and findings, we pass the Ruling, Ruling 1. M/s Vadilal is not a Goods Transport Agency. In thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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