2024 (6) TMI 473 - AAR - GST

GST Ruling: Transport Agency's Advance Tax Query Dismissed, Input Tax Credit Eligibility Confirmed Under Section 16

In Re: M/s. EFC Logistics India Pvt. Ltd.

The SC ruled that a Goods Transport Agency seeking an advance ruling on GST chargeability for rental services found the application not maintainable under ... Scope of Advance Ruling application - Taxability - supplier, being the owner of the vehicle itself, can charge GST on rental/hiring services under the Forward Charge Mechanism or not - ITC - Applicant being a Goods Transport Agency, can claim the Input Tax Credit in terms of Section 16 of GST Act 2017, on the basis of suppliers invoices or not. Scope of Advance Ruling application - Whether the supplier, being the owner of the vehicle itself, can charge GST on rental/hiring services under the Forward Charge Mechanism, even though his service is exempted? - HELD THAT:- This question of chargeability on inward supply of services appears to be not maintainable in view of the Section 95 (a) of the CGST Act, 2017. As per the said section, 'advance ruling' means a decision provided by the Authority or the Appellate Authority (or the national appellate authority) to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100 (or of section 101 C), in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant - In the instant case, no supply in respect of renting/hiring of vehicles is undertaken or proposed to be undertaken by the Applicant. So, no ruling can be pronounced in this regard. Whether the Applicant being a Goods Transport Agency, be able to claim the Input Tax Credit in terms of Section 16 of GST Act 2017 on the basis of suppliers invoices? - HELD THAT:- As per Section 16 (1) of the Act, every registered person is entitled to take ITC charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business. In the present case, it is seen that the Applicant is engaged in providing transport service and opted to pay GST @12% under the Forward Charge Mechanism. So, ITC can be admissible to the Applicant subject to fulfilment of conditions and restrictions as specified in Section 16 of the CGST Act, 2017. Issues involved: Application for advance ruling u/s 97 of CGST Act, 2017 and OGST Act, 2017 regarding GST chargeability on rental/hiring services by a supplier who is the owner of the vehicle and Input Tax Credit eligibility for a Goods Transport Agency.Ruling on GST Chargeability: The question of whether a supplier can charge GST on rental/hiring services under the Forward Charge Mechanism is deemed not maintainable as per Section 95(a) of the CGST Act, 2017 since no supply in this regard is undertaken or proposed by the Applicant.Ruling on Input Tax Credit (ITC): The Applicant, being a registered person under GST, may be eligible to claim ITC on input tax charged on supplies used in the course or furtherance of business, subject to the conditions and restrictions specified in Section 16 of the CGST Act, 2017.Key Details:- The Applicant, a Goods Transport Agency, sought ruling on whether a supplier can charge GST on rental services and if ITC can be claimed based on supplier invoices.- The Applicant provides transport services and opted to pay GST under the Forward Charge Mechanism.- The Applicant planned to enter into a rental agreement with a vehicle owner for inclusive services like fuel, toll, driver salary, and maintenance.- The Applicant argued that services provided by the vehicle owner to a GTA are exempt from GST as per Notification No. 12/2017-Central Tax (Rate).- The personal hearing was held, but the Revenue did not submit comments or attend.- The ruling clarified the inapplicability of GST chargeability on rental services and outlined the conditions for claiming ITC under Section 16 of the CGST Act, 2017.- The ruling mentioned the appeal process available to the Applicant or jurisdictional officer if aggrieved by the decision.Separate Judgement: No separate judgment was delivered by the judges.