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TaxTMI 
TaxTMI 
TaxTMI 
2022 (6) TMI 462
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....rtation are agreed between the parties under such agreements. Specimen agreements have been submitted. 2. Vadilal submits that after delivering the goods at the concerned destination, the refrigerated vehicle comes back; and during such return journey, ordinarily, the vehicle travels empty i.e. without transporting any goods. However, plastic trays in which Vadila transported and delivered the goods at the concerned destination may be lying empty at such place, and therefore such empty plastic trays may be brought back in the refrigerated vehicle during their return journey. 3. Vadilal submits that the independent agencies who supply refrigerated vehicles charge the contracted rates as transportation charges, which is for the round trip of the refrigerated vehicle i.e. for transporting Vadilal's goods to the concerned destination and for bringing back the vehicle after such delivery. Appropriate amount of GST is paid on the transportation charges for the round trip. 4. Vadilal submitted that since refrigerated vehicles ordinarily travel back without any goods being transported i.e. in empty condition; it has engaged a few agents/agencies who could locate customers whose goods co....
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....ransportation expenses from the agency. M/s. Celcious Logistics Solutions Pvt. Ltd. is the middle agency/agency for locating customers in respect of such further transportation and journey also. 6. Vadilal submits that in case the refrigerated vehicles are used for transporting goods of independent customers during the return journey or for further travel as discussed in para (5) above, then the applicant would have to engage other transporters for bringing back empty plastic trays to the applicant's premises at Ahmedabad, and other locations where the applicant has such business operations. For this purpose, other independent transporters would be employed and appropriate transportation charges (i.e. freight) would be paid to them, and applicable GST liability on such transportation charges would also be discharged. 7. Question on which Advance Ruling sought: 1. Who is the person liable to pay GST for transportation of goods of customers located by an independent agency engaged by the applicant, while refrigerated vehicles used for transportation of the applicant's goods travelled back on return journey, after unloading and delivering the applicant's goods at the destination? ....
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....refore the vehicle would be under the possession of the applicant till it returns to the original place. But reverse charge method is applicable in this transaction, and therefore the applicant is not liable to pay GST in this transaction. (iii) As discussed in para (5) above, the vehicle may be utilized for further transportation, instead of the return journey. In the example discussed in para (5) above, the applicant's goods would be delivered and unloaded at Raipur, and thereafter the vehicle would travel from Raipur to Patiyala and then from Patiyala to Noida, and the like. For such transportation service, Vadilal would raise a bill/invoice to the middle agency (i.e. M/s. Celcius Logistics) in respect of transportation of the goods of the customers located by such agency. Like the invoices referred to above, the details of the customer (i.e. the owner of the goods), the description of the goods and the transportation charges recovered by the applicant by the middle agency would be shown with the GST payable thereon in such invoice. The middle agency would make payment of transportation charges so billed to Vadilal. Specimen bills/invoices that Vadilal would be raising in such....
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.... are transported in the vehicles (i.e. refrigerated vans) after Vadilal's goods are unloaded at the applicant's branch or godown premises, for which reverse charge making the agency or the Customer as the person liable to pay GST is attracted to transport of goods by road and issues consignment note, by whatever name called. In view of this definition, ownership of the vehicle used for transportation of goods is immaterial. The condition of a person issuing consignment note is also procedural or regulatory; and it is not open to a person actually providing service in relation to transportation of goods to contend that he was not "goods transport agency" and hence not liable to pay GST only because any document like a consignment note was not issued by him. The tax is imposed for providing service in relation to transport of goods by road. (viii) In view of the above factual and legal position, the applicant submits that it would be the service provider in these transactions, but the liability to pay GST would be that of the independent agency who would be locating the customers, or the customers whose goods are actually transported by the applicant. Such transactions are of servi....
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.... transporters and vehicle owners. Such service providers raise their bills to the applicant, and show details like the name of the applicant and the place of destination, distance in terms of Kilometers, transportation charges etc. Some of the GTA service providers are registered with the GST Department whereas some of them are not registered persons. The transporters who are registered with the GST Department also show details of GST payable by them on value of the transportation service while raising the bill in the nature of tax invoice. But those who are not registered persons, they do not show details of GST payable, while showing all other details on their bills. Specimen tax invoices issued by transporters registered with the GST Department and also specimen bills issued by transporters who are not registered persons, are enclosed. (ii) In these cases, transporters have charged the agreed transportation charges, which are the fixed rate for the round trip. Even though the vehicle like a refrigerated van may have to come back without transporting any goods during the return journey, the transporters actually charge for transportation service for the entire round trip; and n....
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....rs in respect of a round trip, and thus the transportation charges recovered by the transporters are for one entire trip, without any bifurcation of transportation charges from the applicant's premises to the concerned destination and the return journey. (v) By virtue of the scheme of Section 17 of the CGST Act, a person may be required to reverse proportionate ITC if input tax service was partly used for exempt or non-taxable outward supply. But return trip of the refrigerated vehicle is not a case where the input service in the nature of goods transportation was partly used for non-taxable outward supply. The transporters are hired for a round trip involving transportation and delivery of the applicant's goods to the concerned destination and for bringing back the empty vehicle. The scheme of Section 17 does not take into its sweep a case like the present one; because it is not legal nor permissible to suggest that the refrigerated vehicle travel back empty and therefore ITC of GST attributable to the value of return journey was inadmissible. The transaction of transportation of Ice cream by utilizing refrigerated vehicles is one composite service transaction, for a complete ro....
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.... relationship of agency as per 11.1 of the Service agreement. iv. For the said reefer hiring facility supplied by Vadilal to Celcius; Vadilal raises invoices on Celcius with description of the service as hire charges of the vehicle; certain invoices also mentioned loading and unloading charges in addition to vehicle hire charges. On perusal of the Tax Invoices No. IN2153031078 dated 18-2-22 and IN2153026801 dated 31-12-21 raised by Vadilal on Celsius, there is neither mention of freight charges nor GST rate, both the said Invoices reflect zero percent IGST rate v. Celcius, receiving this service from Vadilal, pays the consideration, as per invoices raised on it. In this way, Vadilal intends to generate additional revenue. vi. We find that Vadilal provides service to Celcius, enabling Celcius to carry on its ( Celcius) business of transportating the goods belonging to its (Celcius) customers. What is forthcoming from the agreement is that Vadilal is supporting the business of Celcius and that Celcius is utilizing the services provided by Vadilal in furtherance of its (Celcius) business. This specific activity of Vadilal falls under the category of Business Support Service supp....
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....the consignor and consignee, registration number of the goods carriage in which the goods are transported, details of the goods transported, details of the place of origin and destination, person liable for paying service tax whether consignor, consignee or the goods transport agency. We note that GST scheme of law makes the issuance of consignment note by a GTA, by whatever name called, mandatory. Thereby, We cannot brush aside the requirement of consignment note issuance by a GTA. We find no merit to deem Vadilal as a GTA. 18. We note that both the Question 1 & 2, hinges on Who is liable to pay GST for transportation of goods of customer of Celcius (an independent agency engaged by Vadilal). We hold that Vadilal has no locus standi, vide Section 95 CGST Act, to seek Ruling on the tax liability for a transaction entered between M/s Celcius and its (Celcius's) customers, wherein Celicus is the service provider and its customers are the service recipient. We refer to Section 103(1) CGST Act, which reads that Advance Ruling shall be binding only on the applicant who had sought it and on the concerned officer/ jurisdictional officer in respect of the applicant. In this case, our Ruli....