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TMI Blog2025 (2) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... gnment note along with the description of the goods being transported. The service of transportation of goods is sub-contracted to the applicant by the Principal GTA. Effectively it appears that, the contract to undertake transportation of goods is given by the consignee/consignor to Principal GTA 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 the Principal GTA - the applicant is giving only vehicles to Principal GTA and thus it is Principal GTA which has the transportation contract with the consignee/consignor. Thus the transaction in this case would be one of renting of vehicles and not that of a Goods Transport Operator. In the transportation industry, as in the subject case, there are situations where one transporter takes the help of another transporter by way of sub-contracting the work. The other person bills the first transporter for sub-contracting service and the main transporter is the actual service receiver. It is generally seen that sub-contractor person is actually providing transportation service on beha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 333042, Rajasthan (hereinafter "the applicant") is fit to pronounce advance ruling as they have deposited prescribed Fee under CGST Act and it falls under the ambit of the Section 97(2) given as under: (a) classification of goods and/or services or both (b) applicability of a notification issued under the provisions of the Act (e) Determination of the liability to pay tax on any goods or services or both A. SUBMISSION OF THE APPLICANT (in brief):- Brief facts of the case : IKTAI (hereinafter referred as 'Applicant') is a registered proprietorship, having its office at Omprakash Jangir, Ward no. 3 Near Canara Bank, Nawalgarh, Jhunjhunu, Rajasthan. The Applicant is registered with jurisdiction GST office in Jhunjhunu, Rajasthan. 2. The Applicant intends to expand into a new business vertical focused on goods transport as a Goods Transport Agency (hereinafter referred to as "GTA"). The Applicant is desirous of entering into agreement with other GTA's (hereinafter referred to as "Principal GTA") for transportation of goods. 3. That the Applicant has prepared a draft agreement to document the terms and conditions for contracting with other GTAs. That as per the draft agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; B. INTERPRETATION AND UNDERSTANDING OF APPLICANT ON QUESTION RAISED (IN BRIEF) 1. In the present case, the Applicant will undertake the transportation of goods. To determine whether the service of transportation of goods qualifies under Entry 18 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, it is pertinent to examine the meaning of "GTA". For the definition of "GTA", we need to refer Explanation (xxxx) to Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. Relevant extract of the same is as follows; 4. Explanation.-For the purposes of this notification,- (xxxx) 'goods transport agency' means, - any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. 2. That from the bare perusal of Explanation (xxxx) to Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, it transpires that the filter for considering something as 'Goods Transport Agency' is issuance of consignment note by the transporter. Upon issuance of consignment note the transporter assumes the lien on goods to be transported, that is to say, the transporter becomes the bailee of the goods. 3. Further, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not covered within the meaning of the term GTA. 5. In terms of the Rule 4B of Service Tax Rules, 1994, '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. 6. That in the matter of Gunesh Logistics Vs. Commissioner of C.Ex. & Service Tax, Jaipur-I [MANU/CE/0514/2019], CESTAT Principal Bench, Delhi held that: "24. Under Rule 4B of the Service Tax Rules, 1994 a consignment note is a document issued by a GTA reflecting the name of the cosigner and consignee, registration number of the goods carried in which the goods are transported, details of the goods transported, details of the place of origin and the destination and the person liable for paying the service tax. The consignment notes issued to by the Applicant which are contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssuance of consignment note by the GTA; 8. That, the Applicant humbly submits that condition relating to issuance of consignment note by GTA, will be satisfied as the transport of goods will be done on the Principal-to-Principal basis and Applicant will issue the consignment note. 9. That, the Applicant will satisfy the conditions laid down to qualify as GTA service. However, there is a contrary view that there cannot be two consignment notes for a single movement of goods hence, the services proposed to be provided by the Applicant should be exempt. 10. That, the Applicant placed reliance on the matter of M/s Saravana Perumal, the Authority of Advance Rulings in Karnataka, vide Order No. KAR ADRG 98/2019, dated 27-9-2019, wherein the Authority of Advance Ruling held that when a registered person issued a consignment note for the transportation of goods belonging to others and undertakes to transport the same for a consideration, he would become GTA. The relevant extracts has been reproduced as follows: "5.4 The Goods Transportation Agency is defined under clause 2(ze) of Notification No. 12/2017-Central Tax (Rate) dated 28,06.2017, for the purpose of the said Notification, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant will be exempted under entry No 18 of notification no 12/2017-Central Tax (Rate) dated 28.06.2017? On the matter this office is of the opinion that the activities carried out by the applicant will be covered under Heading 9966 (Rental services of transport vehicles) and tax rate will be applied as per entry No 10 of Notification no 11/2017-Central Tax (Rate) dated 28.06.2017. As the entry No 18 of notification no 12/2017-Central Tax (Rate) dated 28.06.2017 covers the heading 9965, the question of exemption under entry No 18 of notification no 12/2017-Central Tax (Rate) dated 28.06.2017 does not arise in the matter. For the above opinion, this office has relied upon the order No MAH/AAAR/RS-SK/26/2020-21 dated 17.09.2020 of Maharashtra Appellate Authority for advance ruling for Goods and Service Tax in the matter of M/s Liberty Translines. In the above ruling MAAAR upheld the order of Maharashtra Advance Ruling Authority which ruled that the applicant not having transportation contract with the actual consignors/consignees and M/s Posco ISDC Pvt Ltd (can be read as Principal GTA in this case) does have the transportation contract with the actual consignors/consignees. Attribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repared a draft agreement to document the terms and conditions for contracting with other GTAs. That as per the draft agreement, the customers of Principal GTA will award contract (hereinafter referred as 'Main Contract') for transportation of goods. The Principal GTA will issue consignment notes to its customers for transportation of goods. Then, the Principal GTA will engage the Applicant for transportation of goods. The Applicant will be responsible to pick up the goods from the loading point and transport the goods to the designated unloading point, as per instructions of the Principal GTA. The Applicant will undertake the transport of goods on principal basis, that is to, he will issue and provide the Principal GTA with a consignment note, for each transport, for transportation of goods. 4. The question Raised by the applicant before the authority is "Whether the activity of the transportation of goods by the applicant will be exempted under entry No 18 of notification no 12/2017-Central Tax (Rate) dated 28.06.2017?" 5. Before proceeding, we found it imperative to go through the entry No 18 of notification no 12/2017-Central Tax (Rate) dated 28.06.2017. That Entry 18 of Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e". On perusal of the CGST Act, 2017, it is revealed that the term consignment note is not defined anywhere in the CGST Act, 2017. We observe that under the erstwhile service tax provisions, while issuing Clarifications on details in consignment note, the Board, vide C.B.E. & C. Circular No. 95/6/2007-S.T., dated 11-6-2007 2007 (7) S.T.R. C3 read with C.B.E. & C. Circular No. 97/8/2007-S.T., dated 23-8-2007 - 2007 (215) E.L.T. (T24-T34) had mentioned that "Rule 4B of Service Tax Rules prescribes that any 'goods transport agency' providing service in relation to transport of goods by road in a goods carriage shall issue a consignment note to the customer. In terms of this rule, the "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". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivery of goods) and issue a consignment note for the same. The activity of the applicant shall be termed as 'renting of vehicles'. It is reiterated that merely owning of trucks and renting them out for transportation of goods does not qualify in the definition of GTA. 11. What we see is that there is a difference between a GTA and a person who owns truck commonly known as transporter who may give transportation service either by himself or through a transport agent i.e. GTA. We have already mentioned above that a consignment note is a necessary qualification to be considered as a GTA as per the explanation in Notification No. 11/2017-C.T. (Rate), dated 28-6-2017. 12. In the transportation industry, as in the subject case, there are situations where one transporter takes the help of another transporter by way of sub-contracting the work. The other person bills the first transporter for sub-contracting service and the main transporter is the actual service receiver. It is generally seen that sub-contractor person is actually providing transportation service on behalf of the first transporter. As per the definition of GTA in the GST Laws, as stated above it is very clear that person ..... X X X X Extracts X X X X X X X X Extracts X X X X
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