TaxTMI 
TaxTMI 
2025 (12) TMI 981
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....West Bengal Authority for Advance Ruling Regulations, 2018. 1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression "GST Act" would mean the CGST Act and the WBGST Act both. 1.2 The applicant is a private limited company incorporated under the Companies Act, 2013. Currently, the applicant is inter alia engaged in B2B trading of goods. The applicant proposes to implement a new model of business ("Proposed Model") wherein it would inter alia be providing transportation services of goods exclusively by road to the customers purchasing such goods from various E-Commerce Operator ("ECO") portals. While the applicant may also be carrying out other kinds of transportation ....
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....estination Mother Hub - Delivery Hub - End customer. Such transportation may take place either through trucks, vans or two-wheelers (or a combination thereto). 2.4 It is clarified and re-iterated that the services provided by the applicant under the Proposed Model would be pursuant to TOUs - wherein the applicant is appointed the Goods Transport Agency ("GTA") for the transportation of goods exclusively by road from the Source Mother Hub to the Delivery Address. 2.5 The consideration for such goods transportation services provided by the applicant (i.e., transportation charges) would also be paid by the end-customers purchasing goods (i.e., recipients of GTA services). However for the sake of administrative convenience, such consideration may be remitted to the applicant by the ECO (on behalf of the customers) which in-turn would have collected such consideration from the customers at the time of purchase of goods on its portal (in case payment is made online at the time of purchase of goods) or, may be collected by the applicant from the customers upon delivery of such goods to such customers (in case payment is made via cash at the time of delivery). The transportation char....
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....Transport Agency" ("GTA") has been defined under Paragraph 4(xxxx) of the Rate Notification (Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017) as extracted hereunder: "(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." A similar definition is also provided under Para 2(ze) of the Exemption Notification. 2.12 The aforesaid definition(s) are similar to the definition under the erstwhile Section 65B(26) of the Finance Act, 1994 ("Finance Act") as extracted hereunder: "(26) "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;" The applicant submits that hence, judicial precedents under the erstwhile Service Tax Regime would be equally relevant and will have persuasive value for the purpose of interpretation of the scope of the entry under the GST law. 2.13 The Applicant submits that the use of the phrase 'in relation to ' in the above reproduced definition of GTA under the Rate Notification further extends the scope ....
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.... responsible for the goods till its safe delivery to the consignee. It is only the services of such GTA, who assumes agency functions, that is being brought into the GST net. Individual truck/tempo operators who do not issue any consignment note are not covered within the meaning of the term GTA. As a corollary, the services provided by such individual transporters who do not issue a consignment note will be covered by the entry at s.no.18 of notification no.12/2017-Central Tax (Rate), which is exempt from GST." 2.16 The applicant submits that in terms of the above-extract, issuance of a Consignment Note would indicate that a lien on the goods has been created in favour of the transporter and such transporter further becomes responsible for any damage occurring to the goods during the course of their transportation until safe delivery to the consignee. While the term "Consignment Note" is not defined under GST law, guidance may be drawn in this regard from Rule 4B of the Service Tax Rules, 1994 which is extracted hereunder: "48. Issue of Consignment Note Any goods transport agency which provides service in relation to transport of goods by road in a go....
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....ly bills does not, ipso facto, creates such liability and the impugned order is not at fault for having held that tax liability does not arise." 2.19 Reliance is also placed on the following cases: * Dinshawas Dairy Foods Ltd. v. CCE [2018 (13) GSTL 170 (Tri-Mum)]; * Mahanadi Coalfields Ltd. v. CCE [2022 (57) GSTL 242 (Tri-Kol)]; * South Eastern Coalfields Ltd. v. CCE [2017 (47) STR 93 (Tri-Del)]; * East India Minerals Ltd. v. CCE and CST [2021 (44) GSTL 90 (Tri)]; * Nandganj Sihori Sugar Co. Ltd. v. CCE, Lucknow [2014 (34) STR 850 (Tri-Del)] * Chartered Logistics Limited v. CCE, Ahmedabad - II {2023 SCC Online CESTAT 388 (Tri-Ahd)J. 2.20 The applicant submits that on the basis of the aforesaid, it is evident that (a) if the entire transportation of goods is exclusively by road and (b) the transporter/service provider issues a Consignment Note, then the transportation services provided are GTA services. 2.21 The applicant submits that even under the Service Tax Regime, this view has been consistently upheld by the Board vide Circular No. 104/7/2008-ST dated 06.08.2008 and Circular No. 186/5/2015-ST dat....
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....sp;9651 Land transport services of Goods 109 996511 Road transport services of Goods including letters, parcels, live animals, household and office furniture, containers and the like by refrigerator vehicles, trucks, trailers, man or animal drawn vehicles or any other vehicles 110 996512 Railway transport services of Goods including letters, parcels, live animals, household and office furniture, intermodal containers, bulk cargo and the like 111 996513 Transport services of petroleum and natural gas, water, sewerage and other goods via pipeline 112 996519 Other land transport services of goods nowhere else classified 125 Heading 9967 Supporting services in transport 154 Group 99679 Other supporting transport services 155 996791 Goods transport agency services for road transport" 2.25 The applicant submits that the Explanatory Notes further indicate the scope and coverage of the heading, groups and service codes of the Scheme of Classification of Services. Explanatory notes for the aforesaid tariff are reproduced hereunder: "9965 Goods transpo....
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....o tong as, (a) the entire transportation of goods is by road and (b) the person transporting the goods issues a consignment note, it would be classified as 'GTA Service"' 2.29 The applicant submits that this position was further re-iterated vide Circular No. 186/5/2015-ST dated 05.10.2015, the relevant portion of which has been extracted hereunder: "It is also clarified that transportation of goods by road by a GTA. in cases where GTA undertakes to reach/deliver the goods at destination within a stipulated time. should be considered as services of goods transport agency in relation to transportation of goods for the purpose of notification No. 26/2012-ST dated 20.06.2012, serial number 7, so long as (a) the entire transportation of goods is by road: and (b) the GTA issues a consignment note, by whatever name called." Considering that the definitions of the terms "GTA" and "courier agency" under erstwhile Service Tax and GST regime are pari materia, the aforesaid clarifications would apply even under the GST regime and would be binding on the Assessing Officers. GTA SERVICES TO BE PROVIDED BY THE APPLICANT TO UNREGISTERED CUSTOMERS/RECIPIENTS UNDER THE PROPOSED MOD....
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....ood Papers Ltd. & Anr. [(1990) 4 SCC 256], the relevant portion of which is extracted hereunder: "4. [...] That is why its construction, unlike charging provision, has to be tested on different touchstone. In fact, an exemption provision is like an exception and on normal principle of construction or interpretation of statutes it is construed strictly either because of legislative intention or on economic justification of inequitable burden or progressive approach of fiscal provisions intended to augment State revenue. But once exception or exemption becomes applicable no Rule or principles requires it to be construed strictly. Truly speaking liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it When the question is whether a subject falls in the notification or in the exemption Clause then it being .in nature of exception is to be construed strictly and against the subject, but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction." 2.34 The applicant submits that the benef....
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....s any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called;" Hence when the applicant issues a consignment note for the transportation of goods belonging to others and undertakes to transport the same for a consideration, he would become a Goods Transport Agency within the meaning of clause (ze) of Notification No. 1212017-Central Tax (Rate) dated 28-6-2017. Further, the Goods Transport Agency is defined in the explanation to clause (iii) of Entry 9 of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017, for the purposes of the said entry, as under: "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;" It could be seen from above that the definition of "goods transport agency" is one and the same for the purposes of both the aforesaid two notifications." 2.37 The applicant further submits that similar views have been adopted by the Hon'ble Authority for Advance Ruling under GST Law in the following cases. inter alia: i. In Re: Balasubramanyam Saravana Perumal [2....
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...., the transit pass in 'Form-G', issued by the mining authority for the purpose of payment of mining royalty, and transportation of iron ore from the mines site. The raising contractors have not issued any other document in the name of the appellant, for the purpose of transportation of iron ore, which can be termed as a consignment note, as stipulated under Rule 4B of the Service Tax Rules, 1994, as amended. As per the legal principles decided by different Benches of Tribunal and relied upon by the appellant, the activities of transportation of iron ore in the present case, do not fall under the GTA service in terms of Section 65(105)(zzp) of the Finance Act, 1994, nor the raising contractors fall under the definition of 'GTA' as defined under Section 65(50b) of the said Finance Act." NANDGANJ SIHORI SUGAR CO LTD vs CCE In term of Section 65(105)(zzp), the taxable service means any service provided to a customer, by a Goods Transport Agency, in relation to transport of goods by road in a goods carriage. In terms of Section 65 (50a) ibid Goods Carriage has the meaning assigned to it in clause 14 of Section 2 of the Motor Vehicle Act, 1988. In terms of Section 65 (50b), Goods T....
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....out issue of consignment note, GRs & billties etc. as prescribed in Rule 4B of the Service Tax Rules, would be simple transportation and not the service of Goods Transport Agency which involves not only undertaking the transportation of the goods handed over to it but also undertaking delivery of the goods to the consignee and also temporary storage of the goods till delivery. When the transports did not issue consignment notes or GRs or Challans or any documents containing the particular as prescribed in Explanation to Rule 4B of the Service Tax Rules, 1994, the Transporters cannot be called Goods Transport Agency and, hence, in these cases, the service of transportation of sugarcane provided by the transporters would not be covered by Section 65(105)(zzp). In view of this we hold that there will be no service tax liability on the appellant sugarcane mills, as they have not received the service from a Goods Transport Agency. (ze) "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. Consignment Note: The term Consignment Note has not been defined in the GST Acts. However,....
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.... cargo handling service but only incidental to the cargo handling service. Where service is provided by a person who is registered as GTA service provider and issues consignment note for transportation of goods by road in a goods carriage and the amount charged for the service provided is inclusive of packing, then the service shall be treated as GTA service and not cargo handling service Issue 3 : Whether time sensitive transportation of goods by road in a goods carriage by a GTA shall be classified under courier service and not GTA service? Clarification: On this issue, it is clarified that so long as, (a) the entire transportation of goods is by road; and (b) the person transporting the goods issues a consignment note, it would be classified as 'GTA Service'. In SI no 16 the applicant has contended that even under the Service Tax regime circular no 186/5/2015-ST dated 05/10/2015 it was, inter alia, clarified that Goods Transport Agency (GTA) has been defined to mean any person who provides service to a person in relation to transport of goods by road and issues consignment note, by whatever name called. The service provided is a composite service which may include va....
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....) dated 28.06.2017. "(ze) "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;" Thus, it can be seen that issuance of a consignment note is the sine-qua-non for a Supplier of service to be considered as a Goods Transport Agency. If such a consignment note is not issued by the transporter, the service provider will not come within the ambit of goods transport agency. 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 its safe delivery to the consignee. As per departmental database, though the applicant got themselves registered for with the GST department for provision of services "Road transport services of Goods including letters, parcels, live animals, household and office furniture, containers and the like by refrigerator vehicles, trucks, trailers, man or animal drawn vehicles or any other vehicles" classified under SAC 996511, it is evident from their Exhibit-D that they have issued consignment note to their consignee/receiver duly menti....
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....sentatives of the applicant during personal hearing. We have also considered the views given by the revenue. 4.2 As per the statement furnished, the applicant is already a registered taxable person under the GST Act and is inter alia engaged in B2B trading of goods. The applicant intends to start a new business model in which it will inter alia provide transportation services of goods exclusively by road to the customers purchasing such goods from various e-commerce operator portals. It is made amply clear that the present application is strictly restricted to this proposed activity only and at the time of application the applicant has not started the activity. The followings are the highlights of the proposed model as stated by the applicant: • Whenever the goods are purchased by customers through the e-commerce portal, the seller will only be responsible for delivering the goods at a designated point called the Source Mother Hub (i.e. the nearest hub from the seller's location) for onward delivery. • The applicant will collect/ pick up such goods from the appropriate Source Mother Hub. • The applicant will deliver the goods to the addr....
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....ther the services provided by the applicant to customers will qualify as 'Goods Transport Agency' (in short GTA) services? 2. Whether the services provided by the applicant to unregistered customers through the e-commerce operator's portal will be eligible for exemption in terms of serial no. 21A of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017, as amended? 4.3 The applicant believes that under the proposed model of activity as detailed in Paragraph 4.2 his activity will be qualified as GTA services. He has referred to the definition of GTA as provided in the Notification No. 11/2017 Central Tax (Rate) Dated 28.06.2017. There GTA has been defined as 'any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called'. According to the applicant, the phrase 'in relation to' has actually widened the concept of GTA by including intermediate or ancillary services provided for and in relation to such transportation e.g. loading/unloading, packing/ unpacking, trans-shipment, temporary warehousing etc. in addition to the actual transportation. The applicant has also submitted that issuing consig....
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.... 3. The person carries out the transport of goods by road. For qualifying as GTA the transport of goods should be made by road only. 4. The person being GTA issues consignment note for such transport of goods from one place to another. It is evident from the above that any person whoever transports goods from one place to another by road cannot be a GTA. The person who transports the goods from one place to another by road and issues a consignment note can be regarded as 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 the safe delivery of the goods to the consignee. A transporter's lien on goods is a legal right that allows him to retain possession of goods until the shipper or consignee pays all outstanding transportation charges. Essentially, it's a security measure for the transporter, ensuring they are paid for their services before releasing the goods. 4.6 Consignment Note has not been defined anywhere in the GST Act or in any notification. Since the concept of GTA under the GST regime is the same as it had been in the erstwh....
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....by CBIC which states that "If such incidental services are provided as separate services and charged separately, whether in the same invoice or separate invoices, they shall be treated as separate supplies", to mean that if a GTA shows packing charges, loading, unloading charges etc., separately in the invoice, the GTA becomes liable to pay GST at the rate of 18% on these services by treating them as cargo handling services. 6.3 After deliberations on the issue and based on recommendations of the 54th GST Council, it is hereby clarified that ancillary or incidental services provided by GTA in the course of transportation of goods by road, such as loading/unloading, packing/unpacking, transshipment, temporary warehousing etc. will be treated as composite supply of transport of goods. The method of invoicing used by GTAs will not generally alter the nature of the composite supply of service. However, if such services are not provided in the course of transportation of goods and are invoiced separately, then these services will not be treated as composite supply of transport of goods.' 4.8 Now we will discuss whether the different features of a GTA as detailed in paragraph....
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....address to be issued by the applicant. • The applicant will issue consignment note which will be serially numbered and will contain inter alia 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. The Specimen copies of such consignment notes are furnished by the applicant. The fact of issuing consignment note can be regarded as a sine qua non for consideration of a supplier of transport services as GTA. Reference has been made by the applicant to several cases related to the erstwhile Service Tax regime where it has been decided that issuing Consignment Note is an essential feature of GTA. The cases of CCE v. JWC Logistics Pvt. Ltd., Chartered Logistics Limited v. CCE, Ahmedabad are a few examples where it is accepted that issuing Consignment Note is in fact an integral and mandatory requirement for a supplier of transport services to be considered as GTA. The Customs, Excise and Service Tax Appellate Tribunal, New Delhi i....
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....sidered as services by courier agency. This aspect is integrally related to the second question raised by the applicant in his application for advance ruling. The exemption provided by entry no. 21A of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 has been extended to GTA only, not to a courier agency. The term 'courier agency' has been defined in clause (u) of definitions to be found in Notification no. 12/2017-Central Tax (Rate) dated 28.06.2017. Courier agency is defined as any person engaged in the door-to-door transportation of time-sensitive documents, goods or articles utilising the services of a person, either directly or indirectly, to carry or accompany such documents, goods or articles. The main point of difference between a courier agency and a GTA lies in the mode of transport used. A GTA exclusively delivers goods via road from one point to another, while a courier agency opts for a multi-modal transportation system that may involve air, rail and road transportation from person-to-person. Unlike a GTA, usually courier agency does not issue consignment note. In this respect the applicant's proposed activity cannot be equated with that of courier ....
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.... Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017. According to the discussions and findings detailed in the preceding paragraphs, we are of the considered view that the applicant is a GTA as per the proposed model and the services provided by the applicant is regarded as services provided by a GTA. As per the Terms of Use for the buyers, select products offered by sellers may be eligible for business purchases on the platform of Flipkart Internet Private Limited. Buyers of those products are registered persons under the GST. There remains another segment of buyers who are individuals having no registration under GST. They are categorised as unregistered persons. Here we reproduce the relevant entry of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017. Sl.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent) Condition (1) (2) (3) (4) (5) [21A Heading 9965 or Heading 9967 Services provided by a goods transport agency to an unregistered person, including an unregistered casual taxable person, other than the following recipients, namely: - (a) any factory....