TaxTMI 
TaxTMI 
2025 (2) TMI 720
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.... Act". The issue raised by M/S TANUJA JANGIR, Omprakash Jangir, Ward no. 3 Near Canara Bank, NAWALGARH, JHUNJHUNU-333042, Rajasthan (hereinafter "the applicant") is fit to pronounce advance ruling as they have deposited prescribed Fee under CGST Act and it falls under the ambit of the Section 97(2) given as under: (a) classification of goods and/or services or both (b) applicability of a notification issued under the provisions of the Act (e) Determination of the liability to pay tax on any goods or services or both A. SUBMISSION OF THE APPLICANT (in brief):- Brief facts of the case : IKTAI (hereinafter referred as 'Applicant') is a registered proprietorship, having its office at Omprakash Jangir, Ward no. 3 Near Canara Bank, Nawalgarh, Jhunjhunu, Rajasthan. The Applicant is registered with jurisdiction GST office in Jhunjhunu, Rajasthan. 2. The Applicant intends to expand into a new business vertical focused on goods transport as a Goods Transport Agency (hereinafter referred to as "GTA"). The Applicant is desirous of entering into agreement with other GTA's (hereinafter referred to as "Principal GTA") for transportation of goods. 3. Th....
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....cent) Condition 18 Heading 9965 Services by way of transportation of goods- a. By road except the services of i) a Goods Transport Agency (GTA). ii) A courier agency NIL B. INTERPRETATION AND UNDERSTANDING OF APPLICANT ON QUESTION RAISED (IN BRIEF) 1. In the present case, the Applicant will undertake the transportation of goods. To determine whether the service of transportation of goods qualifies under Entry 18 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, it is pertinent to examine the meaning of "GTA". For the definition of "GTA", we need to refer Explanation (xxxx) to Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. Relevant extract of the same is as follows; 4. Explanation.-For the purposes of this notification,- (xxxx) 'goods transport agency' means, - any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. 2. That from the bare perusal of Explanation (xxxx) to Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, it transpires that the filter for considering something as 'Goods ....
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....mes responsible for the goods till its safe delivery to the consignee. Therefore, it is only the service of such GTA, who assumes agency functions, that is being brought into the GST net. The individual truck/tempo operators who do not issue any consignment note are not covered within the meaning of the term GTA. 5. In terms of the Rule 4B of Service Tax Rules, 1994, 'consignment note' means a document issued by a goods-transport-agency against the receipt of goods for the purpose of transport of goods by road in a goods carriage, which is serially numbered, and contains the name of 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. 6. That in the matter of Gunesh Logistics Vs. Commissioner of C.Ex. & Service Tax, Jaipur-I [MANU/CE/0514/2019], CESTAT Principal Bench, Delhi held that: "24. Under Rule 4B of the Service Tax Rules, 1994 a consignment note is a document issued by a GTA reflecting the name of the cosigner and consignee, regis....
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.... Commissioner that the Applicant was not performing GTA service but was performing STG service cannot be sustained." 7. That from a plain reading of the above judgement it can be inferred that to qualify as GTA service, following conditions need to be satisfied: A. There should be an activity in relation to transport of goods by road; B. Issuance of consignment note by the GTA; 8. That, the Applicant humbly submits that condition relating to issuance of consignment note by GTA, will be satisfied as the transport of goods will be done on the Principal-to-Principal basis and Applicant will issue the consignment note. 9. That, the Applicant will satisfy the conditions laid down to qualify as GTA service. However, there is a contrary view that there cannot be two consignment notes for a single movement of goods hence, the services proposed to be provided by the Applicant should be exempt. 10. That, the Applicant placed reliance on the matter of M/s Saravana Perumal, the Authority of Advance Rulings in Karnataka, vide Order No. KAR ADRG 98/2019, dated 27-9-2019, wherein the Authority of Advance Ruling held that when a registered person issued a consignment ....
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....nt will be exempted under entry no. 18 of Notification no.12/2017-Central Tax (Rate) dated 28.06.2017? D. COMMENTS OF THE JURISDICTIONAL OFFICER: - Comments received from the Superintendent, Range-34, CGST JHUNJHUNU, Rajasthan vide letter F.NO. GL-2/CGST-34/MiscCorres./01/2020 Dated: 09.10.2024are as under: Question Raised before the authority 1. Whether the activity of the transportation of goods by the applicant will be exempted under entry No 18 of notification no 12/2017-Central Tax (Rate) dated 28.06.2017? On the matter this office is of the opinion that the activities carried out by the applicant will be covered under Heading 9966 (Rental services of transport vehicles) and tax rate will be applied as per entry No 10 of Notification no 11/2017-Central Tax (Rate) dated 28.06.2017. As the entry No 18 of notification no 12/2017-Central Tax (Rate) dated 28.06.2017 covers the heading 9965, the question of exemption under entry No 18 of notification no 12/2017-Central Tax (Rate) dated 28.06.2017 does not arise in the matter. For the above opinion, this office has relied upon the order No MAH/AAAR/RS-SK/26/2020-21 dated 17.09.2020 of Maharashtra Appella....
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.... note for the same in lien of certain agreed upon consideration. Thus, the term 'principal GTA' may be construed accordingly in the order. 3. We found that the Applicant has made various submissions in support of their contention that they can issue a consignment note (as a GTA) to Principal GTA for the same transportation of goods by road, happening in the same vehicle belonging to the Applicant. We also found that Applicant submitted that they prepared a draft agreement to document the terms and conditions for contracting with other GTAs. That as per the draft agreement, the customers of Principal GTA will award contract (hereinafter referred as 'Main Contract') for transportation of goods. The Principal GTA will issue consignment notes to its customers for transportation of goods. Then, the Principal GTA will engage the Applicant for transportation of goods. The Applicant will be responsible to pick up the goods from the loading point and transport the goods to the designated unloading point, as per instructions of the Principal GTA. The Applicant will undertake the transport of goods on principal basis, that is to, he will issue and provide the Principal GTA with a consignme....
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....ned meaning of the GTA, it is clearly seen that issuance of the consignment note is an essential condition for any person to act as GTA. If such a consignment note is not issued by the transporter, the service provider will not come within the ambit of GTA. If a consignment note is issued, it indicates that the lien on the goods has been transferred (to the transporter) and the transporter becomes responsible for the goods till it's safe delivery to the consignee. 7. Now, we intend to explore the meaning of term "consignment note". On perusal of the CGST Act, 2017, it is revealed that the term consignment note is not defined anywhere in the CGST Act, 2017. We observe that under the erstwhile service tax provisions, while issuing Clarifications on details in consignment note, the Board, vide C.B.E. & C. Circular No. 95/6/2007-S.T., dated 11-6-2007 2007 (7) S.T.R. C3 read with C.B.E. & C. Circular No. 97/8/2007-S.T., dated 23-8-2007 - 2007 (215) E.L.T. (T24-T34) had mentioned that "Rule 4B of Service Tax Rules prescribes that any 'goods transport agency' providing service in relation to transport of goods by road in a goods carriage shall issue a consignment note to the customer. ....
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....ingle consignment note for a single movement of goods is also a pre-requisite. Thus, issuance of consignment note to the consignor is a essential condition to qualify as a GTA. In case an entity only provides vehicles on rent or hire or other services for transport of goods for some consideration then it shall not be called a GTA. In the present case, the principal GTA has a contract with the owner of goods (consignor) for the transportation of goods and it shall be the responsibility of the principal GTA to uphold the contract (safe delivery of goods) and issue a consignment note for the same. The activity of the applicant shall be termed as 'renting of vehicles'. It is reiterated that merely owning of trucks and renting them out for transportation of goods does not qualify in the definition of GTA. 11. What we see is that there is a difference between a GTA and a person who owns truck commonly known as transporter who may give transportation service either by himself or through a transport agent i.e. GTA. We have already mentioned above that a consignment note is a necessary qualification to be considered as a GTA as per the explanation in Notification No. 11/2017-C.T. (Rate),....