TMI Blog2020 (7) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... ence there will be one consignment note for movement of goods to a place, to be issued by POSCO. Rate of Tax (GST) - Held That:- applicant cannot issue another consignment note for the same goods and for the same transaction where consignment notes are already issued by POSCO. Hence the applicant, in respect of the subject transaction cane of be treated as a GTA and therefore cannot charge GST @12% under Forward Charge mechanism as a GTA. - GST-ARA-39/2019-20/B-24 - - - Dated:- 5-3-2020 - MS. P. VINITHA SEKHAR, AND MR. A.A. CHAHURE, MEMBER PROCEEDINGS (Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been filed under Section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act respectively] by M/s. Liberty Translines , the applicant, seeking an advance ruling in respect of the following questions. 1. Considering the nature of transaction, under the new proposition where Liberty Translines the Applicant, will be issuing the consignment note in addition t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant functions as a mere Transporter of goods for which consignment note is issued by some other party which acts as GTA for that transaction. Here, applicant s service gets classified under SAC 996511 for which scheduled rate of tax is Zero percent. 2.4 Applicant now wants to opt for payment of GST @ 12%, on forward charge basis and avail Input Tax Credit as permitted by Notification No. 20/2017- C.T. (Rate) dated 22.08.2017. 2.5 In particular, there is a company named POSCO ISDC Pvt. Ltd (POSCO) which provides GTA service and has opted for GST payable on forward charge basis at 12%, by claiming the related ITC. Since POSCO does not have enough fleet of its own, it sub-contracts GTA service to the Applicant who provides the GTA service as a sub-contractor. 2.6 Applicant would like to issue a consignment note (as a GTA) to POSCO, who is also a GTA, and the latter will in turn issue a second consignment note to the final client for the same transportation of goods by road happening in the same vehicle belonging to the Applicant where E-way bill will be prepared by POSCO only. 2.7 Further, the recipient of the goods (client of POSCO) availing the transportation will ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A service (SAC 996791) and is going to remain unchanged. 2.10.8 Applicant would be right in charging GST @12% under Forward Charge mechanism to POSCO in terms of Notification No. 20/2017-C.T. (Rate) dated 22.08.2017 when POSCO, as the main contractor, is already charging GST @12% under the same Notification. 2.10.9 POSCO would be eligible to claim credit of the 12% GST charged by the Applicant in its invoice for sub-contracted GTA service under Forward charge mechanism. 2.10.10 Procedurally, it is correct to have two GTA Service Providers and two consignment notes for the same movement of goods, one issued by the Applicant as a sub-contractor and the other by POSCO as the main contractor. 2.11 GTA is not defined in GST law. The meaning is contained only by way of an explanation to Entry 9(iii) of Notification No. 20/2017. But as per Section 65(50b) of the erstwhile Finance Act 1994, GTA means any commercial concern which provides service in relation to transport of goods by road and issues consignment note, by whatever name called. Thus the definition has two limbs namely:- a) providing service in relation to road transport and b) issuing consignment note. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the service changes. It is under these circumstances that the sub-contractors of GTA service classify their service under SAC 996511 which is not liable to tax. 2.13.2 In this connection reliance is placed on the decision in the case of Bharathi Soap Works Vs Commr, CCE, Guntur as reported in 2007 (9) TMI 55 - CESTAT, BANGALORE In this case, Appellant argued that, transporter had not issued any consignment note hence the service is not GTA service and he is not liable for reverse charge. CESTAT ruled against the Assessee observing that Appellant was not contesting the fact of transportation of goods. He was merely finding fault with the documentation. CESTAT further held that the transporter was bound to issue consignment note. 2.14 It is common for businessmen to sub-contract their work fully or partially. If the sub-contracting is partial, it is likely that the classification of service may not be exactly the same as the main contract. However, where the entire service is sub contracted, there is no scope to say that the services provided by the main contractor and the sub-contractor are two different services, for example, if an architect sub-contracts his e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot say that some of his activity is under reverse charge and some is under forward charge. He cannot claim any exemption under GTA service because that is the condition of the notification. It is the condition of Notification 20/2017 that a GTA opting for forward charge shall be liable to pay GST @ 12% on all the services of GTA supplied by it . 2.19 There is no definition of consignment note either in the Act or in the Rules under GST Laws. As commonly understood that it is a document given by the transporter while receiving the goods to be transported. It is a document of title to the goods. The document generally contains details like serial number, name of the consigner and consignee, registration number of the goods carriage in which the goods are transported, details of goods being transported, details of the place of origin and destination, and the person who will be liable for the service tax payable from the consignor, consignee or the goods transport agency. There is nothing in those provisions which contradicts the concept of sub-contracting. There is nothing which says that more than one consignment notes cannot be issued for the same transportation. Extracts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stant Commissioner of S.T.(D-847) Nodal 4, Mumbai along with the State Tax Officer (C-836) Nodal 4, Mumbai appeared. 4.2 The application was admitted and called for final hearing on 28.01.2020. Shri Kishor Choudhari, C.A., along with Shri Sanjay Baing, CFO, appeared, made oral and written submissions. Jurisdictional Officer Shri Suryakant Kathe, Assistant Commissioner of S.T.(D-847) Nodal 4, Mumbai along with the State Tax Officer (C-836) Nodal 4, Mumbai appeared and made written submissions. We heard both the sides. 05. DISCUSSIONS AND FINDINGS: 5.1 We have gone through the facts of the case, documents on record and submissions made by both, the applicant as well as the jurisdictional officer. 5.2 Applicant has submitted that it is providing Goods Transport Agency services (GTA) and has opted for 5% GST payable by the recipient under reverse charge. Hence presently, Applicant does not charge GST to its clients and does not claim Input Tax Credit on goods or services used in supplying the service. In certain situations applicant functions as a mere transporter of goods for which applicant s service gets classified under SAC 996511 for which scheduled rate of tax is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appear that there is an intention by the consignee/consignor to award the transportation contract to the applicant. The situation would have been different if the contract for transportation of goods was received by the applicant from the consignee/consignor. 5.3.4 Applicant has submitted that there is no requirement under GST law that there cannot be more than one consignment notes. A perusal of the GST Laws also do not reveal that there can be more than one consignment note in one particular transaction. In any transaction of transportation, generally it is the transporter having a contract with the consignor/consignee who has to issue consignment notes as is being done in the subject case by POSCO. 5.3.5 Under the erstwhile service tax provisions, while issuing Clarifications on details in consignment note, the Board, vide CBE C. Circular No.95/6/2007-S.T., dated 11.6.2007-2007 (7) S.T.R. C3 read with CBE 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 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sub-contracting the work. The other person (in this case, the applicant) bills the first transporter (in this case, POSCO) for subcontracting service arid the main transporter is the actual service receiver. It is generally seen that subcontractor 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 who issues consignment note will be treated as goods transport agency. In the subject case, POSCO issues consignment note, which is further stamped by its consignee, on delivery of the goods and is therefore a GTA for this transaction. Any services by way of transportation of Goods by road other than through GTA would be exempt supply as per the entry of notification as quoted in the above paragraph. In the subject case Applicant is providing the transportation service but not as GTA but only as a truck owner to POSCO. Further, a consignment note is proof of the custody of goods during the movement and transportation of goods. For a single transaction and the same movement. of goods, there cannot be multiple consignment notes. Hence there will be one consignmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; (f) whether applicant is required to be registered; (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. 5.6.3 We observe in the instant case, the question which has been raised by the applicant is not pertaining to any of the matters mentioned in Section 97 (2) of the GST Act. In fact, the question raised is with respect to procedure which the applicant wants to follow. Section 97 (2), which encompasses the questions, for the ruling by this Authority does not deal with the issue of procedures to be followed by applicants. Hence, it is held that this authority does not have jurisdiction to pass any ruling on such matters. 06. In view of the above discussions, we pass an order as follows: ORDER (Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA- 39/2019-20/B-24 Mumbai, dt. 05.03.2020 For reasons a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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