Query on Customs House Agents a

[Akshay Sharma]

Hello Members, thank you for your response in Advance.

A CHA Code is being used on a Bill of Entry as on date. The GSTIN associated with this CHA code has been cancelled in the year 2021(A). As per CBLR Regulations the CHA License cannot be transferred or Sublet to another person. However, an another Firm registered (B) under GST is raising tax invoice for providing services of Clearing and Forwarding to the Importer/Exporter as on date. I want to know who will be the actual service provider as per GST Act, A or B. Further, A is liable to Pay GST or Not? If yes on what charges should he discharge GST Liability. Also if this is some regular practice in customs kindly elaborate on this issue

[Sadanand Bulbule]

Under GST law, the “actual service provider” is the person who provides services, raises the invoice and receives consideration.

Since Firm B is registered under GST Act and is raising invoices for CHA/clearing & forwarding services, Firm B will be liable to discharge GST @18% (SAC 9967).

Firm A, whose GSTIN is cancelled, cannot raise invoices or collect GST. Therefore, no GST liability arises on Firm A.

[KASTURI SETHI]

In simple words, who receives the payment from another person, that person is either seller (supplier) of goods or services or both. Focus is on "who". Thus in this scenario, "B" is the actual supplier of service. 

[Akshay Sharma]

Ok sir. But if it’s established Firm A is getting paid some amount by Firm B for using their CHA Code then will the Gst liability arise on Firm A because of receiving consideration? As the GSTIN of Firm A is cancelled since 2021.

[KASTURI SETHI]

Cancellation of registration does not mean clean chit. Cancellation does not absolve a person of GST liability. In case A has actually received the payment directly or indirectly in lieu of service provided to another person, then A cannot escape GST liability even after cancellation of GST registration.

AI Summary

Supplier of Services under GST: the invoice-issuing, consideration-receiving entity bears GST liability; cancellation is not exculpatory. Under GST the actual service provider is the person who provides the service, issues the invoice and receives consideration; the firm issuing invoices for CHA services is therefore prima facie the supplier and liable for GST. Cancellation of GST registration does not relieve a person of tax obligations; if the cancelled registrant receives consideration for services, GST liability can still arise, and this interacts with regulatory prohibitions on transfer or subletting of CHA licences.