2024 (5) TMI 39 - AAR - GST

Bundled transport services with packing and loading qualify as composite GTA services under Entry 9(iii) notification 11/2017-CT(R)

In Re: M/s. DRS Dilip Roadlines Limited

AAR Telangana ruled on classification of bundled services including transportation, packing, loading, unloading, and unpacking. The authority held that ... Classification of service - Supply of services including transportation, packing, loading, unloading & unpacking - GTA service or not - transport of goods by road - single bundled supply or not - whether the principal supply in this transaction is transportation? - HELD THAT:- The Hon’ble High Court of Kerala in the case of ABBOTT HEALTHCARE PRIVATE LIMITED VERSUS THE COMMISSIONER OF STATE TAX KERALA, THE COMMISSIONER, CGST, KERALA, UNION OF INDIA, STATE OF KERALA, THE KERALA AUTHORITY FOR ADVANCE RULING, THE KERALA APPELLATE AUTHORITY FOR ADVANCE RULING [2020 (1) TMI 338 - KERALA HIGH COURT] held that a composite supply must take into account supplies as affected at a given point in time on “as is where is” basis. The Hon'ble Supreme court of India in a catena of case law has ruled that illustrations in a statute are part of the statute and help to elucidate the principle of the Section in DR. MAHESH CHAND SHARMA VERSUS SMT. RAJ KUMARI SHARMA [1995 (12) TMI 395 - SUPREME COURT]. Therefore a composite supply should be similar to a supply mentioned in the illustration to the definition in Section 2(30), where two or more taxable goods or services are supplied along with each other to constitute a composite supply. The entry in the notification enumerates ‘Services in relation’ to transport of goods by road. Thus all services rendered in relation to transportation of goods including packing, loading, unloading & unpacking fall under this entry provided that such services have a direct and immediate link with the covanent/agreement for transport of goods i.e., the contract shall be for transport, packing, loading, unloading and unpacking of the same goods. Therefore, if the transactions made by the applicant are in substance contracts for transport, packing, loading, unloading of the same goods entrusted by their customers, then such services fall under Entry 9(iii) of notification 11/2017-CT (R) dt. 28-06-2017 i.e., goods transport Agency Issues Involved:The judgment involves determining whether the activities of a Goods Transport Agency (GTA) fall under the definition of a GTA as per the relevant provisions of the GST Act.Brief Facts of the Case:M/s. DRS Dilip Roadlines Limited, a GTA, has raised queries regarding whether their bundled services, including transportation, packing, loading, unloading, and unpacking, qualify as services provided by a GTA. They have cited relevant notifications, circulars, and previous rulings to support their case.Questions Raised:The primary question raised is whether the activities of M/s. DRS Dilip Roadlines Limited fall under the definition of a Goods Transport Agency.Personal Hearing:A personal hearing was conducted where the applicant reiterated their position that their activities constitute services provided by a GTA.Discussion & Findings:The Authority analyzed the definition of a composite supply as per the CGST Act and relevant case law. It was established that for services to be considered a composite supply, they must be naturally bundled and supplied together. The judgment also referenced specific notifications and Supreme Court rulings to clarify the scope of services provided by a GTA.Ruling:The Authority ruled that the activities of M/s. DRS Dilip Roadlines Limited would fall under the category of Goods Transport Agency if the services of transport, packing, unpacking, loading, and unloading are in relation to the same goods. However, if these services are in relation to different goods, they would not qualify as services provided by a GTA.