TMI Blog2020 (9) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... 94. 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 consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions under the MGST Act. 2. The present appeal has been filed under Section 100 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 the MGST Act respectively] by M/s. Liberty Translines, 9, Kashiram Jamnadas Building, 5, P.D'Mello Road, Mumbai-400009 (herein after referred to as the Appellant ) against the Advance Ruling No. GST-ARA-39/2019-20/B-24 dated 05.03.2020 = 2020 (7) TMI 49 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA , passed by the Maharashtra Authority for Advance Ruling (MAAR). BRIEF FACTS OF THE CASE 3.1 The Appellant is the owner of various goods transport vehicles. They have registered themselves as Goods Transport Agency (GTA) under the CGST Act, 2017, and have classified their services under SAC 996791 bearing the description Goods transport agency services for road transport , in terms of the Annexure to the Notification No. 11/2017-C.T. (Rate), dated 28.06.2017. Earlier, they had opted for the payment of 5% GST, payable by the recipient of the GTA Services under Reverse Charge Mechanism in terms of the Notification No. 11/2017-C.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the Government, the Appellant wanted to come in the main stream of GST by adopting forward Charge mechanism. The Appellant believed, and was advised on this count that, what has been envisaged above by the Appellant as a sub-contractor and M/s. Posco ISDC Pvt. Ltd as the main contractor for GTA Service, was permissible under the GST law and there was no impediment to or irregularity in the same. 3.7 The Appellant wanted to know whether the Appellant could also act as a GTA in the aforementioned arrangement, in terms of Notification No. 20/2017-Central Tax (Rate), dated 22.08.2017, and could issue consignment notes and charge GST at the rate of 12% on forward charge basis, when M/s. Posco ISDC Pvt. Ltd would already be acting as a GTA and would be issuing consignment notes in terms of the same notification, although it would mean that there would be two GTAs in a single transportation of goods, with two consignment notes for the transportation activity of the same goods. 3.8 Accordingly, the Appellant had filed an application for Advance Ruling with the Maharashtra Authority for Advance Ruling raising the following questions: (i.) Considering the nature of transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e consignee of the goods after the said goods were delivered to its destination, mentioned in the consignment notes. Since all the details of the goods, including the nature and description of the goods, place of the origin and destination of the goods, would be shared with M/s. Posco ISDC Pvt. Ltd. and not with the Applicant, the consignment note was rightfully issued by M/s. Posco ISDC Pvt. Ltd. who would be availing the services of the Applicant by way of hiring the transport vehicles, belonging to the Applicant. The Maharashtra ARA also stressed that the E-way bill, in this proposed transaction, was being issued by M/s. Posco ISDC Pvt. Ltd., and not by the Applicant, which dealt, reveals that the actual transportation of the goods is being carried out by the M/s. Posco ISDC Pvt. Ltd. with the aid of the transport vehicles owned by the Applicant. Thus, M/s. Posco ISDC Pvt. Ltd would be the actual GTA. Hence, the services supplied by the Applicant, where they are supplying the transport vehicles to M/s. Posco ISDC Pvt. Ltd., would not be classified as GTA services. Instead their services would be classified as hiring out of transport vehicles. (b) As regards the question ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural aspect. 4.7 The Advance Ruling Authority failed to appreciate that the Appellant is being deprived of his substantial right to opt for forward charge and claim input tax credit, as per Notification 20/2017 dated 22.08.2017. 4.8 The Ruling amounts to a restriction on doing business because a GTA who has opted for forward charge under Notification 20/2017 dated 22.08.2017 does not have any option but to charge 12% GST. 4.9 The Advance Ruling Authority failed to appreciate that a GTA has been defined with reference to the entity' and not with reference to 'a transaction'. As such, a person who has issued a consignment note even for one transaction, must be treated as a GTA for all other transactions. 4.10 The Advance Ruling Authority failed to appreciate that the concept of Non-GTA transportation SAC 996511, applies only to small transport operators and not to fleet owners, as in this case. 4.1 1 The Advance Ruling Authority erred in holding that it is not permitted to have two consignment notes for the same transportation of goods and failed to appreciate that two consignment notes for the same transportation of goods are perfectly logical, legal and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is procedurally correct to have two GTAs issuing two consignment notes in the transportation of the same goods. PERSONAL HEARING 6. A personal hearing in the matter was held on 9.9.2020, which was attended by Shri. Kishor Chaudhari (Chartered Accountant) as a representative of the Appellant, and Shri Suryakant Kate (Assistant Commissioner), State Tax, in the capacity of the Respondent/Jurisdictional Officer in the subject appeal matter. 6.1 During the course of the said persona] hearing, Shri Chaudhari submitted a synopsis of the arguments and reiterated the points made therein. He also produced copies of case laws pronounced by AAR. Rajasthan and Uttarakhand to support their contention. The main points mentioned in the synopsis, submitted by Shri Chaudhari, are as under: (a) The subject transaction is a case of bailment or sub-bailment under the Indian Contract Act, 1872. The Appellant is a bailee and has lien over goods transported; (b) The Carriage by Road Act, 2007 mandates the issuance of Goods Receipt Note, known as Lorry Receipt, which is same thing as the Consignment Note under the GST Law; (c) The fact that the main contractor does not accept th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Posco ISDC Pvt. Ltd. only, and not by the Applicant, the actual transporter, in this case, would be M/s. Pasco ISDC Pvt. Ltd., who are entitled to issue the consignment note in the capacity of transporter. (c) As regards the question as to whether Mis. Posco ISDC Pvt. Ltd. would be eligible to avail the ITC of the GST charged by the Appellant at the rate of 12%, the Maharashtra Advance Ruling Authority held that the Appellant is not the proper person to ask this question as the question does not pertain to them. (d) Further, as regards the question asked by the Appellant as to whether it is procedurally correct to have two GTAs issuing two consignment notes at the same time in the single goods transportation activities, the Maharashtra Advance Ruling Authority held that the said question is not covered under the set of the questions specified under section 97(2) of the CGST Act. 2017, in respect of which the clarifications can be sought under the Advance Ruling, therefore, they do not have jurisdiction to pass any ruling in this matter. 8. Having gone through the above appeal, and the rulings of the Maharashtra Advance Ruling Authority (MAAR) on the questions raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Further, it has also been submitted by the Appellant that in this proposed arrangement., E-way bills, as required under the GST law for the movement of goods, are to be issued by M/s. Posco ISDC Pvt. Ltd., and not by the Appellant, which clearly shows that M/s. Posco ISDC Pvt. Ltd. is the actual transporter as construed under Rule 138 of the CGST Rules, 2017, which provides for the E-way bill mechanism. This rule clearly states that where the goods are handed over to the transporter for transportation by road, in such case, the transporter shall generate the E-way bill. 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 GT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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. 12. As regards the 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, 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. 13. As regards the questions (iii) and (iv) asked by the Appellant, we concur with the Rulings passed by the MAAR, wherein t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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