Empty containers by rail qualify for concessional GST under the residual transport entry, subject to input tax credit restrictions.

Transportation of empty containers by rail by a container train operator was treated as falling under the residual rail-transport entry rather than the specific container-transport entry, because the latter applies to goods transported in containers and does not expressly cover empty containers. The term "goods" was taken broadly enough to include empty containers, so GST was held payable at 5% under Entry No. 9(i) of Notification No. 11/2017-Central Tax (Rate), not 12% under Entry No. 9(iv). The concessional rate under Entry No. 9(i) was also held to depend on the mandatory condition that input tax credit on goods used for the service is not availed or utilised for payment of central or integrated tax.

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Issues: (i) Whether transportation of empty containers by rail by a Container Train Operator falls under Entry No. 9(i) of Notification No. 11/2017-Central Tax (Rate) or Entry No. 9(iv), and what GST rate applies. (ii) Whether Entry No. 9(i) applies to transportation of empty containers only on compliance with the input tax credit restriction.

Issue (i): Whether transportation of empty containers by rail by a Container Train Operator falls under Entry No. 9(i) of Notification No. 11/2017-Central Tax (Rate) or Entry No. 9(iv), and what GST rate applies.

Analysis: Entry No. 9(iv) applies only where goods are transported in containers by rail by a person other than Indian Railways. Empty containers are not treated as goods being transported in containers for the purpose of that specific entry. In the absence of a specific entry for empty containers, the residual transport-by-rail entry under Entry No. 9(i) applies. The expression "goods" in Section 2(52) of the Central Goods and Services Tax Act, 2017 was treated as wide enough to include empty containers.

Conclusion: Transportation of empty containers by rail is taxable at 5% under Entry No. 9(i), not 12% under Entry No. 9(iv).

Issue (ii): Whether Entry No. 9(i) applies to transportation of empty containers only on compliance with the input tax credit restriction.

Analysis: Entry No. 9(i) carries a condition that credit of input tax charged in respect of goods used in supplying the service is not utilised for payment of central tax or integrated tax on the supply of the service. That restriction was treated as mandatory for the concessional rate under the said entry.

Conclusion: Entry No. 9(i) applies only if the applicant does not avail or utilise the relevant input tax credit while charging GST at 5%.

Final Conclusion: The ruling recognizes empty containers as falling under the general rail-transport entry and grants the concessional rate of GST, while also requiring compliance with the prescribed input tax credit condition.

Ratio Decidendi: Where a specific notification entry does not expressly cover a service, the general entry applies, and the term "goods" may include empty containers for the purpose of classifying rail transport services under GST.

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