Hiring of Vehicle for Transportation of Goods

[Deepak D]

Hello,

My Client has provided vehicle on hire for Goods Transportation to his Customer who is engaged in the service of Distribution and Logistics Services. Now the GST Officer has contended that the Services provided to the Non GTA as he is not acting as GTA as per definition. Whereas on verification of the SAC of Customer in GST Portal. He is showing himself as a Goods Transpoter. MY Client had claimed Exemption on Hire charges as per entry no. 22 to Notification No. 12/2017. 

Please let me know that how to prove that the customer is engaged in Goods Transportation Services and Hiring was for Transport of Goods is exempt 

[KASTURI SETHI]

Both GTO (Goods Transport Operator) and GTA are different terms.

GTO is NOT GTA. Read the following decision of AAAAR (Maharashtra)

2020 (9) TMI 1104 - APPELLATE AUTHORITY FOR ADVANCE RULING, MAHARASHTRA - IN RE : LIBERTY TRANSLINES\

 

[Shilpi Jain]

Ideally in these kind of situations the agreement should have sufficient safeguard clauses.

In the present case see whether your lessee has issued consignment notes. If yes, then he is a GTA. Else you need to show that the undertaking by the lessee was to use it as a GTA 

AI Summary

Vehicle hire services to logistics companies may lose GST exemption if consignment notes aren't issued properly A client provided vehicle hire services for goods transportation to a customer engaged in distribution and logistics services. The GST officer contended that services were provided to a non-GTA entity, challenging the exemption claim under entry 22 of Notification 12/2017. The discussion clarifies that Goods Transport Operator (GTO) and Goods Transport Agency (GTA) are different terms. A Maharashtra AAAAR ruling established that merely hiring vehicles to transporters doesn't constitute GTA services - the key distinction lies in whether consignment notes are issued to consignors/consignees. The advice suggests examining whether the lessee issued consignment notes to determine GTA status and ensure agreements contain adequate safeguard clauses for such situations.