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2020 (9) TMI 1104 - AAAR - GSTClassification of services - GTA Services or not (SAC 996791) - sub-contractor - 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 - GST under forward charge mechanism - N/N. 0/2017-Central Tax (Rate), dated 22.08.2017 - input tax credit - Procedurally, is it correct to have two GTA Service Providers and two consignment notes for the same movement of goods, one issued by the Appellant as a sub-contractor and the other by M/s. Posco ISDC Pvt. Ltd. as the main contractor? - challenge to AAR decision. HELD THAT:- On perusal of the aforementioned meaning of the GTA, it is clearly seen that issuance of the consignment note is an essential condition for any person to act as GTA - On perusal of the CGST Act, 2017, it is revealed that the term consignment note is not defined anywhere in the CGST Act, 2017. However, the mention of the same was made under the explanation to Rule 4B of the Service Tax Rules, 1994. In the subject case, the Appellant is not receiving goods directly from the consignor or consignee of the goods, but from M/s. Posco ISDC Pvt. Ltd., who themselves are acting as GTA, where they are receiving the goods from the consignor/consignee, and issuing the consignment notes in respect thereof The Appellant is merely a Goods Transport operator here and not a GTA - 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. 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 under the Heading 9966 of Notification No. 11/2017-C.T.(Rate), dated 28.06.2017, bearing the description “rental services of transport vehicles”. Appellant's contention wherein it has been argued that when the whole work is sub-contracted, the classification of the service cannot change - HELD THAT:- It is opined that the Appellant's contention is fallacious as it has been established above that the actual transporter in the subject case is M/s. Posco ISDC Pvt. Ltd, and not the Appellant, therefore, it would not be proper to say that the whole work in the subject case, which is transportation of the goods by road, acquired by M/s. Posco ISDC Pvt. Ltd. from their clients, have been sub-contracted to the Appellant. The Appellant is merely supporting M/s. Posco ISDC Pvt. Ltd. in their activity as the GTA by way of renting out their transport vehicle. Appellant's contention that the Advance Ruling Order has imposed restrictions on them in doing business as the order passed by the Advance Ruling Authority does not permit them to charge 12% GST on the forward charge basis in terms of Notification No.20/2017-C.T.(Rate), dated 22.08.2017 - HELD THAT:- It 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. Order passed by AAR upheld.
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