Applicant liable for GST under reverse charge on transport services per Notification 13/2017-CT(R), lacks standing for third-party transactions under Section 95

AAR Gujarat ruled that the applicant was liable to pay GST under reverse charge mechanism for goods transport agency services supplied to it, as per Notification 13/2017-CT(R). The authority determined the applicant could not be deemed a GTA since consignment note issuance requirements were absent in its relationship with the independent agency. Regarding transportation of third-party goods by the independent agency, AAR held the applicant lacked locus standi under Section 95 CGST Act to seek ruling on tax liability for transactions between the independent agency and its customers, as advance rulings are binding only on the applicant under Section 103(1) CGST Act.

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Issues Involved:
1. Liability to pay GST for transportation of goods of customers located by an independent agency during the return journey of refrigerated vehicles.
2. Liability to pay GST for transportation of goods of customers located by an independent agency when vehicles are used for further transportation after unloading the applicant's goods.
3. Liability to pay GST for goods transport agency service used for bringing back empty plastic trays.
4. Admissibility of Input Tax Credit (ITC) on GST paid for the round trip of refrigerated vehicles, including the return journey when vehicles travel empty.

Issue-Wise Analysis:

1. Liability to Pay GST for Transportation of Goods of Customers Located by an Independent Agency During the Return Journey:
Vadilal argued that the reverse charge mechanism under Notification No. 13/2017-CT (Rate) applies, making either the independent agency (M/s. Celcius Logistics) or the customers whose goods are transported liable to pay GST. The Authority, however, found that Vadilal provides Business Support Services to Celcius, enabling Celcius to transport its customers' goods. Vadilal is not considered a Goods Transport Agency (GTA) as it does not issue consignment notes and does not take responsibility for the safe delivery of the goods. Therefore, Vadilal is not liable to pay GST as a GTA, and the tax liability is on forward charge for the Business Support Services provided to Celcius.

2. Liability to Pay GST for Transportation of Goods of Customers Located by an Independent Agency When Vehicles are Used for Further Transportation:
Similar to the first issue, Vadilal's role in facilitating the transportation of goods by Celcius does not make it a GTA. The Authority reiterated that Vadilal supplies Business Support Services to Celcius and is not responsible for the goods transported. The tax liability remains on forward charge for the services provided to Celcius. Vadilal has no locus standi to seek a ruling on the GST liability for transactions between Celcius and its customers.

3. Liability to Pay GST for Goods Transport Agency Service Used for Bringing Back Empty Plastic Trays:
The Authority agreed with Vadilal's submission that it is liable to pay GST under the reverse charge mechanism for the transportation charges paid to independent transporters for bringing back empty plastic trays. This is in accordance with Serial No. 1 of Notification No. 13/2017-CT (Rate), which specifies that the recipient of GTA services is liable to pay GST.

4. Admissibility of Input Tax Credit (ITC) on GST Paid for the Round Trip of Refrigerated Vehicles:
The Authority concurred with Vadilal's submission that ITC is admissible on the GST paid for the round trip of refrigerated vehicles, even if the vehicles travel empty during the return journey. Vadilal pays an agreed freight for the entire round trip, which includes both the onward and return journeys. Therefore, the ITC on the entire GST paid is admissible, as the transportation charges are treated as a composite transaction for the round trip.

Ruling:
1. Vadilal is not a Goods Transport Agency and supplies Business Support Services to Celcius. The tax liability for these services is on forward charge. Vadilal has no standing to seek a ruling on the GST liability for services provided by Celcius to its customers.
2. Same as above ruling.
3. Vadilal is liable to pay GST under the reverse charge mechanism for the freight charges paid to its transporters for bringing back empty plastic trays.
4. ITC on GST paid for the round trip of refrigerated vehicles, including the return journey when vehicles travel empty, is admissible to Vadilal.

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