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TMI Blog2020 (7) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... e above services of the Applicant among the following? - 12% (entry 9(iii) of the Notification 11/2017(CT) Rate dated 28 June 2017]; - 12% (entry 11(1) of the Notification 11/2017(CT) Rate (hied 28 June 20171; - 18% (entry 11(ii) of the Notification 11/2017(CT) Rate doted 28 June 2017); - Or any other 3. Whether the Applicant would be eligible to avail the input tax credit of the 12% GST charged by the third-party transporter? 4. Whether the transporter would be right in charging GST @12% under forward charge mechanism to Applicant in terms of Notification No 20/2617-Central Tax (Rate) dated 22 August 2017 when Applicant as the main contractor, is already charging GST@ 12% under the same Notification, which is going to remain unchanged? 5. Procedurally, is it correct to have two GTA Service Providers and two consignment notes for the same movement of goods, one issued by the Applicant as main contractor and the other by transporters sub-contractor? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g. Vide this application they have redrafted their questions which are mentioned above. 2.6 The transport services provided by applicant includes undertaking dispatch of consignments for POSCO group companies viz. Between Customs Port and the place of business of POSCO group companies for import and export consignments; and From POSCO group companies to its customer in India. 2.7 In the instant case, Applicant has entered into a back-to back arrangement with the logistics provider, Royal Translines Pvt. Ltd. (Transport Vender/Transport Agency), under which the steel coils are transported by the Transport Vendor/Transport Agency from Port of Import to POSCO-MAH's factory in Mangaon, Raigad or from POSCO-MAHS factory in Mangaon, Raigad to its customers in India. Consignment notes are always issued by the applicant in respect of such transportation. POSCO-MAH and POSCO-MAH customers, acknowledge the completion of the transportation services by stamping and signing the consignment note issued by the applicant on delivery of the goods in the designated premises. The Transport Vendors/ Transport Agencies are of the view that, if they also issue a consignment note for the same consignme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. (Rate) dated 22.08.2017 with effect from 22.08.2017 and reads as under: Sr.No. Chapter, Section or heading Description of Services Rate (per cent) Condition 9 Heading 9965 (Goods Transport Services) (iii) Services of goods transport agency ("GTA") in relation to transportation of goods (including used household goods for personal use). Expln: goods transport agency means any person who provides services in relation to transportation of goods by road and issues consignment note, by whatever name called. 2.5 Provided that credit of input tax credit charged on goods and services used in supplying the services has not been taken (Please refer explanation no. (iv)] Or 6 Provided that the goods transport agency opting to pay central tax @6% under this entry shall thenceforth, be liable to pay central tax @ 6% on all the services of GTA supplied by it. 4. Explanation: (iv) Whatever rate has been prescribed in this notification subject to the condition that credit of input tax credit charged on goods or services used in supplying the service has not been taken, it shall mean that: (a) credit of input lax credit charged on goods or services used exclusively in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supporting transport services 99679 Goods transport agency services for road transport 996792 Goods transport agency services for other modes of transport 996793 Other goods transport services 996799 Other supporting transport services n.e.c 2.15 In such a case, supply of services by the Applicant would be covered under Entry 11 of Notification No. 11/2017-CT(Rate) dated 28 Jun 2017 to be chargeable to GST @12% on forward charge basis but will still be required to issue a consignment note in order to qualify as GTA and provide such services. 2.16 Alternatively, the services of the Applicant would be classified under service code 996799 and would be covered under entry 11 (ii) of the Notification No. 1/2017 CT (Rate) dated 28 Jun 2017. 2.17 Applicant has also submitted that in such cases, if there cannot be two GTA's for single transportation activity & there cannot be two consignment notes for the same goods, then the services of the Applicant would be covered by other supporting services in transport not elsewhere specified and covered under entry 11(ii) of the Notification No. 11/2017-CT(Rate) dated 28 Jun 2017 & would be chargeable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No. 12/2017 CT(R) dt.28/062017 (Heading 9966) and therefore will not be covered under Entry no.11 of Notification No. 11/2017 -CT(R) dt 28/062017 (support services). 3.5 Services by way of giving on hire to a GTA, a means of transportation of goods are exempt from GST under Notification No. 12/2017-C T. (Rate) dated 28th June 2017. When the tax is not payable, the question of taking any tax credit does not arise. 3.6 When Applicant is acting as a GTA for providing services in relation to transportation of goods by road and is issuing a consignment Note, classification of services for the Transport Vendor/Agency will be SAC: 996601-Rental services of road vehicles including buses, coaches, cars, trucks and other motor vehicles, with or without operators. (Notification No. 12/2017 entry no. 22). 3.7 The applicable GST rate on the above services of the Transport Vendor/Agency. Services by way of giving on hire to a GTA, a means of transportation of goods are exempt from GST under Notification number 12/2017-Central Tax (Rate) dated 28th June 2017. Hence there is no tax on such services. 3.8 "Goods transport agency" means any person who provides service in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 Briefly stated, the Applicant provides logistics solutions to POSCO Group companies in India. The subject application has been filed by the applicant with respect to transportation services wherein they undertake dispatch of consignments for POSCO group companies: (a) between Customs Port and the place of business of POSCO group companies for import/export consignments; and (b) From POSCO group companies to their customer in India. 5.3 It has been submitted that Applicant, either provides transportation services on its own account, or engages a third-party transporter. In the former case, applicant engages its own fleet of vehicles and in the latter situation, the Applicant enters into a back to back arrangement for transportation of goods with Transport Vendors/ Transport Agencies (third party). In both the situations, it is the applicant who are issuing the Consignment Notes, which are stamped by the receiver of the transported goods. The applicant has also submitted t at the th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assification of Services, the service code Heading 996511 includes: - i. transportation by road off frozen or refrigerated goods is specially refrigerated trucks and cars; transportation by road of petroleum products (crude oil, natural gas and refined petroleum products) in special tank trucks; ' ii. transportation by road of other bulk liquids or gases in special tank trucks; iii. transportation by road of Individual articles and packages assembled and shipped in specially constructed shipping containers designed for ease of handling in transport; iv. transportation by road of goods in. men- or animal-drawn vehicles; household/office goods and furniture removal services; v. ancillary services, such as packing and carrying and in-house moving; vi. transportation of letters and parcels by any mode of land transport, other than railway, on behalf of postal and courier services; vii. transportation by road of dry bulk goods such as cereals, flours, cement, sand, coal, etc; transportation by roar of live animals; viii. transportation by road of other freight in other specialized/non-specialized vehicles not elsewhere classified, such as transport of concrete, transpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 2017]; * Or any other Having held that the services supplied by the applicant to POSCO group of companies are covered under Heading 996511, we have no hesitation in holding that GST applicable in this case will be covered under Entry 9(iii) of the Notification 11/2017(CT) Rate dated 28 June 2017 subject to conditions mentioned therein i.e. a GST Rate of 5% will be provided that credit of input tax credit charged on goods and services used in supplying the services has not been taken and a GST Rate of 12% will be applicable provided that the goods transport agency opting to pay central tax @ 6% under this entry on all the services of GTA supplied by it. Q. No. 3. Whether the Applicant would be eligible to avail the input tax credit of the 12% GST charged by the third-party transporters? We have already held that GST applicable in this case will be covered under Entry 9(iii) of the Notification 11/2017(CT)Rate dated 28 June 2017 subject to conditions mentioned therein i.e. a GST Rate of 5% will be applicable provided that credit of input tax credit charged on goods and services used in supplying the services has not been taken. However, if applicant opt to pay GST at the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove services of the Applicant among the following? - 12% (entry 9(iii) of the Notification 11/2017(CT) Rate dated 28 June 2017]; - 12% (entry 11(1) of the Notification 11/2017(CT) Rate dated 28 June 2017]; - 18% (entry 11 (ii) of the Notification 11/2017(CT) Rate dated 28 June 2017]; Answer : GST applicable in this case will be covered under Entry 9(iii) of the Notification 11/2017(CT) Rate dated 28 June 2017 subject to conditions mentioned therein i.e. a GST Rate of 5% will be applicable provided that credit sf input tax credit charged on goods and services used in supplying the services has not been taken and in the alternative a GST Rate of 12% will be applicable, provided that the applicant, goods transport agency, opting to pay central tax @6% under this entry on all the services of GTA supplied by it. Q. No. 3. Whether the Applicant would be eligible to avail the input tax credit of the 12% GST charged by the third-party transporters? Answer : The third party transporter are not charging any GST in services supplied by them to applicant and hence, the applicant cannot avail input tax credit in this respect. Q. No. 4. Whether the transporter would be right in chargi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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