GST AAR TAMIL NADU: GST on Renting Goods Carrier to GTAs (Goods Transport Agency)

GST on Renting Goods Carrier to GTAs

AUTHORITY FOR ADVANCE RULING TAMIL NADU GOODS & SERVICE TAX

The supply of goods carriage on hire or lease to a Goods Transport Agency is a taxable supply. By virtue of SI. No.22 of Notification No.12/2017-CT (Rate) dated 28-06-2017, the activity is charged to Nil rate of tax.

BACKGROUND: 

M/s. Dharmaraju Ragul, an unregistered entity is planning to purchase goods carriage and give it on rent/lease to Goods Transportation Agency (GTA). Being a service provider, the applicant is doubtful whether their activity would fall under taxable supply.

ISSUE RAISED:

• Applicability of Notification issued under the provisions of this Act and
• Determination of the liability to pay tax on any goods or services or both.

QUESTION(S) ON WHICH ADVANCE RULLING IS REQUIRED

Query-1; Whether goods carriage given on lease to Goods Transportation Agency is a taxable supply?
Query-2; If the above-mentioned supply is an exempted/nil rated supply, are there any conditions to be satisfied to avail that exemption?
Query-3; Whether the service provider has to be goods transportation agency to avail the above mentioned exemption or it can be any other person ?

IMPORTANT PARA

Para 13. As per the facts submitted by the applicant, as on date they are unregistered and are venturing into the business of providing on hire, goods carriage for a period of five years. The goods carriage which the applicant going to procure and give it on hire to M/s. Celcius Logistics Solutions Private Limited is only for the purpose of transportation of goods; that M/s, Celcius Logistics Solutions Private Limited is a logistic company as per the agreement and are in the business of Goods Transport Agency Service since they are Issuing consignment note. The activity of providing goods carriage by the applicant to a Goods Transport Agency is a taxable supply. However, by virtue of Sl. No. 22 of Notification No. 12/2017-CT (Rate) dated 28-06-2017, the activity is charged to Nil rate of tax.

Para 14. As per entry 22 of the above Notification, there is no specific condition prescribed with regard to that entry and hence, as per the notification, no condition is prescribed for claiming the same.
Para 15. In the instant case, the service rendered is ‘providing vehicle on hire’. the service provider is the applicant, M/s. Dharmaraju Ragul who is providing the goods carriage vehicle on hire for a consideration and the Service receiver is M/s. Celcius Logistics Solutions Private Limited, who necessarily must be a goods transport agency. No condition is specified for claiming the facility provided in the notification for the service provider who is giving the goods carriage on hire.

RULING

1. The supply of goods carriage on hire or lease to a Goods Transport Agency is a taxable supply. By virtue of Sl. No.22 of Notification No.12/2017-CT (Rate) dated 28-06-2017, the activity is charged to Nil rate of tax.
2. Column 5 of the Table in the Notification is for conditions applicable for that specific entry. At Sl. No. 22 of the said Notification, no condition is specified for claiming the facility provided under the notification.
3. As discussed in para 11 and 12, the service provider, namely the applicant need not be a goods transport agency to claim the facility of the Notification.