I am a GST registered contractor who undertakes civil contract works. I also own a lorry which is used for transportation of goods by road and hire charges is collected by me directly. Is the service provided by me by way of transportation of goods by road is taxable or exempted as covered by Notification No. 12/2017 under heading 9965
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A lorry is a special purpose motor vehicle. Who is the service receiver ? Write name of the department to whom service is being provided. Your service does not fall under HSN 9965.
Service is provided to General public (B2C). Im the owner of the lorry and hire charges are collected directly by me only.
This service is not exempted. It is taxable. Only threshold exemption is available. It is covered under "Renting or leasing of goods". In Service Tax era, such service was known as "Right to Use of Tangible Goods".
If its a hire transaction i.e. payment made based on time period and not generally dependent on distance, would be liable @18% under HSN 9966.
However, if it is a transaction of transport of goods i.e. consideration dependent on the distance, it would be exempt as it would be transportation of goods other than by GTA.
There is no difference on GTA and GTO in my view. The transport agency owns the responsibility of the goods that he is carrying on his vehicle. Also, the operator might be asked by his client / customer if anything happens to the goods carried by the operator. Then where is the difference between both agency and operator. Operator may also be given some paper as an acceptance of lien on goods during transit. So, the changes of claiming exemption stating as operator is questionable by department.
It is pertinent to go through the following case law (pertaining to pre-GST era). still it is relevant in this context.
2018 (13) G.S.T.L. 170 (Tri. - Mumbai) = 2018 (4) TMI 912 - CESTAT MUMBAI DINSHAWS DAIRY FOODS LTD. Versus COMMISSIONER OF C. EX., NAGPUR
With due regard to Sh.Ganeshan Kalyani Ji, I am of the view that in the absence of consignment note, GTO and truck owner both are out of the definition of GTA in terms of Notification No.12/17-CT(Rate) dated 28.6.17 (as amended) Para No.2 (ze) of Notification refers. Hence both GTO(Goods Transport Operator) and truck owner exempted from GST.
Further it is pertinent to mention that liability of Service Tax on Goods Transport Services by road was shifted from truck owner or truck operator to GTA in the Budget for the year 2004-05.The then Finance Minister in his Budget Speech said, " I may clarify that there is no intention to levy Service Tax truck owners or truck operators".
Moreover, the same definition of GTA has been carried forward to GST from Service Tax.
See clause (50b) of Section 65 of erstwhile Finance Act and under above mentioned Notification in GST.
DIFFERENCE BETWEEN GTO AND GTA
GTO is NOT GTA. So vehicles hired to GTO are not eligible for exemption under Notification No.12/17-CT(R) dated 28.6.17 as amended (serial no.22). Taxable under Notification No.11/17-CT(R) dated 28.6.17 (serial no.10) Decision of AAAR is as under:-
IN RE : LIBERTY TRANSLINES = 2020 (9) TMI 1104 - APPELLATE AUTHORITY FOR ADVANCE RULING, MAHARASHTRA