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TMI Blog2022 (2) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Ruling, A.P vide Ruling AAR No.25/AP/GST/2021 dated 20.07.2021. 1. Background of the Case: 1.1 The appellant i.e., Principal Commissioner Central Tax Guntur CGST Commissionerate filed an application in Form GST ARA-03 on 08-11-2021 before the Appellate Authority for Advance Ruling, Andhra Pradesh seeking clarification in case of M/s Andhra Pradesh State Road Transport Corporation,.A.P 1.2 M/s Andhra Pradesh State Road Transport Corporation, (APSRTC) was established on 11th January,1958 as per The Road Transport Act, 1950 by G.O. Ms No.36, Home (Transport IV) dated 06-01-1958. As a consequence of bifurcation of the erstwhile United State of Andhra Pradesh into Telangana and Andhra Pradesh, APSTRC (erstwhile) was bifurcated into TSRTC and APSRTC, with some issues still pending regarding the division of assets and liabilities between the two corporations. 1.3 APSRTC, though operating under the Public Transport Department (PTD) of Government of Andhra Pradesh, is completely an independent entity with operational autonomy and operates as an independent corporation with its own sources and application of funds. The Central Government owns a stake of 31% with Rs. 35.62 Crores as c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor Vehicles Act, 1988: 'State Transport undertaking' means any under taking providing road transport service, where such undertaking is carried on by, i. The central Government or State Government ii. Any Road Transport Corporation established under Section 3 of the Road Transport Corporation Act, 1950 (65 of 1950) iii. Any municipality or any corporation or company owned or controlled by the Central Government or one or more State Governments, or by the Central Government and one or more State Governments: iv. (Zilla parsihad or any other similar local authority) Explanation: For the purpose of this clause, 'road transport service' means a service of motor vehicles carrying passengers or goods or both by road for hire or reward: From the definition, the road transport service provided by any state undertaking carried on by the above authorities mentioned at Sl.no.1 to 4 is exempted vide Entry no.22 of Notification No.12/2017 Central Tax (rate). In the instant case the APSRTC are the "provider" of the transport service i.e. hiring of buses and the Public Transport Department (PTD) of Government of Andhra Pradesh is the "recipient". Both the APSRTC (havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpreted in the light of what is clearly expressed. Therefore, the AAR's ruling that the Public Transport Department as 'state undertaking' is not tenable in Law. It is undisputed fact that the Public Transport Department (PTD) is purely a Department which will operate under the administrative control of Transport, Road and Building Department, Government of Andhra Pradesh and it does not fall under ambit of Notification No.12/2017-Central Tax (Rate) dated.28.06.2017. 2.6 The law in respect to interpretation of exemption notification is well settled. In all tax matters one has to interpret the taxation statute strictly. Simply because one class of legal entities is given a benefit which is specifically stated in the notification, does not mean that the benefit can be extended to legal entities not referred to in the notification as there is no equity in matters of taxation. An exemption has got to be construed strictly however fairly. There's no scope of extending the words and expressions utilized in the notification on the premise of analogy or on equitable consideration. In view of the above, it appears that the AAR ruling dt: 20.07.2021 giving exemption un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtaking'. In this regard, it is reiterated by M/s APSRTC, that the term 'state Transport undertaking' is defined in the very same notification 12/2017 itself and in view of the express definition, it shall be mandatorily applicable. a. As per definitions 2 (zzk) of notification N. 12/2017 "state transport undertaking" has the same meaning as assigned to it in clause (42) of section 2 of the Motor Vehicles Act, 1988 [59 of 1988); Hence, the meaning of the words 'State Transport undertaking' shall necessarily be drawn from the Motor vehicles Act,1988. b. Section 2(42) of Motor Vehicles Act, 1988 defines State Transport undertaking "State transport undertaking" means any undertaking providing road transport service, where such undertaking is carried on by, - (i) the Central Government or a state Government; (ii) any Road Transport Corporation established under section 3 of the Road Transport Corporations Act, 1950 (64 of 1950); (iii) any municipality or any corporation or company owned or controlled by the Central Government or one or more State Governments, or by the Central Government and one or more State Governments (iv) Zilla Parishad or any oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Rate). The AAR has taken the stance that the activity is eligible for exemption. 6.1 In paragraphs 2.1 and 2.2, the appellant contends that APSRTC, the 'provider' of the transporter service and the Public Transport Department (PTD) of Govt. of A.P., the 'recipient' of service are related and no much distinction found between them. In instant case the provider and the recipient of the transport service are two different legal entities. 6.2 In paragraph 2.3, the appellant contended that the classification of services as 'leasing of movable and immovable assets' and does not fall under category of 'hiring service or services the way of giving on hire'. In this context, it is pertinent to discuss the rules of classification of services before arriving to a conclusion. The Central Board for Indirect Tax and Customs issued "Explanatory Notes to the Scheme of Classification of Services" on 12th June 2018 wherein it has been specified that - "The Scheme of Classification of Services adopted for the purposes of GST is a modified version of the United Nations Central Product Classification. 2. The Explanatory notes for the said Scheme of Classification ..... X X X X Extracts X X X X X X X X Extracts X X X X
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