TaxTMI 
TaxTMI 
2026 (5) TMI 782
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....after referred to as the 'CGST Act, 2017' and the 'SGST Act, 2017') are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act, 2017 would also mean reference to the corresponding similar provisions in the SGST Act, 2017. 1. This appeal has been filed by Mr. Imankalyan Sarbajna, Joint Commissioner, State Tax, Large Taxpayer Unit, Govt. of West Bengal against the Ruling passed by the West Bengal Advance Ruling Authority (hereinafter referred to as WBAAR) vide Advance Ruling Order No. 15/WBAAR/2025-26 dated 09.12.2025 in respect of the application for Advance Ruling filed by M/s Flipkart India Private Limited (GSTIN-19AABCF8078M1ZY). 2. The concerned respondent, M/s Flipkart India Private Limited (applicant before the WBAAR) filed their application before the WBAAR under sub section (1) of section 97 of the GST Act and the rules made there under seeking an advance ruling in respect of following questions: (a) Whether the services provided by the Applicant to customers would qualify as "Goods Trans....
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....rvices under the Proposed Model would be provided in terms of the Customer's/Buyer's Terms of Use (TOUs) under which, the respondent would be appointed as the Goods Transport Agency (GTA) for transportation of goods exclusively by road from the concerned Source Mother Hub to the Delivery Address. viii. The respondent submitted that the consideration for the goods transportation services provided by it, namely the transportation charges, would be payable by the end-customers purchasing the goods, who would be the recipients of the GTA services. It was further submitted that, for administrative convenience, such consideration may be remitted to the respondent by the ECO on behalf of the customers. In such cases, the ECO would collect the transportation charges from the customers at the time of purchase of goods on its portal, where payment is made online. Alternatively, where payment is made in cash at the time of delivery, the transportation charges may be collected by the respondent directly from the customers upon delivery of the goods. ix. The respondent also submitted that the transportation charges would be specifically disclosed in the tax invoice or bill of ....
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....d that, where such GTA services are provided by it to unregistered customers placing orders for goods through the ECO portal, the same would be exempt from GST in terms of Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017, as amended. xviii. The respondent referred to various statutory definitions, relevant rules, departmental circulars, explanatory notes and CBIC flyers relating to Goods Transport Agency (GTA) services of the present GST regime as well as the erstwhile Service Tax regime and also relied upon different case laws. xix. On the basis of the aforesaid legal provisions, clarifications and judicial precedents, the respondent contended that the services proposed to be provided by the respondent are correctly classifiable as Goods Transport Agency services and not as courier services. xx. The respondent further submitted that, once the services proposed to be provided by it are held to be classifiable as Goods Transport Agency (GTA) services, and the recipients of such services are unregistered persons, the respondent would be eligible for the benefit of exemption under Sl. No. 21A of Notification No. 12/2017-Central Ta....
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....es for in relation to transportation; ii. that issuing consignment note is a sine qua non for classification as GTA; iii. that the respondent's proposed service is in no way similar to the courier agency service; iv. that the proposed activity of the respondent is a GTA service and covered under serial no 21A of Notification no. 12/2017-Central Tax (Rate) dated 28.06.2017 as amended when the respondent provides the GTA service to individuals being unregistered persons; v. that the goods under transportation are never owned by the respondent and the transfer of title of goods takes place directly from the seller to the buyer as specified in the Buyer's Terms of Use; vi. that the respondent's role is restricted to undertaking transportation of goods only in the capacity of a GTA; vii. that the application (made before the WBAAR) was restricted to the sphere of transportation of goods by road only; 6. Consequently, the WBAAR restricted their discussion and reference to the specific area of transportation of goods by road and based their decision on the submissions made by the respondent. They noted, inter alia, the following: ....
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.... v. The respondent is providing the service of transport of goods from the seller (from the source mother hub) to the buyer and reverse transport in case of goods return. vi. The transportation of goods from the Source Mother Hub to the Delivery address would be done exclusively by road. Transportation may take place either through trucks or vans or two wheelers or a combination thereto. There would be one single consignment note from the Source Mother Hub to the Delivery address to be issued by the applicant. vii. The respondent would 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. viii. Reference made by the respondent 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 were also considered by the WBAAR. 7. The WBAAR furth....
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....e. The WBAAR ruled that the proposed transportation activity qualifies as a Goods Transport Agency (GTA) service under GST law and that such services provided to unregistered end customers are exempt from GST under Serial No. 21A of Notification No. 12/2017-Central Tax (Rate). Submission of the Appellant before the WBAAAR 11. Aggrieved by the said ruling given by the WBAAR vide Advance Ruling Order No-15/WBAAR/2025-26 dated 09.12.2025, the Joint Commissioner, State Tax, Large Taxpayer Unit, Govt. of West Bengal (hereinafter referred to as "the appellant") filed the instant appeal before the West Bengal Appellate Authority for Advance Ruling (hereinafter referred to as the WBAAAR). 12. The appellant submitted the following points/grounds while preferring the instant appeal before the WBAAAR authority: A. That it has been submitted that the learned WBAAR has erred in ruling that the proposed model of the respondent would fall within the scope and ambit of Goods Transport Agency services. B. That as per the proposed model of the respondent, the transportation activity involves multiple transit points, namely, Source Mother Hub, Destination Mother Hub, Delive....
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....t qualify as consignment notes. I. That, a consignment note, inter alia, requires details of the registration number of the goods carriage and details of the place of origin. Evidently, in the instant case, the documents purportedly stated to be consignment notes do not contain the registration number of the goods carriage, since the respondent would never be in a position to know the exact vehicle details of each and every goods carriage after the goods leave the Source Mother Hub. J. That it is common knowledge that the last leg of transportation to end customers is undertaken by onboarded delivery partners using their two-wheelers, bicycles, or electric-operated two-or three-wheelers, and the same is random and decided on the basis of availability of delivery partners at the last-mile delivery hub. Further, in many cases, such mode of transportation does not qualify as a motor vehicle and, consequently, as a goods carriage in terms of Sections 2(28) and 2(14) of the Motor Vehicles Act, 1988. K. That the responsibility of transportation of the respondent starts from the Source Mother Hub, which is in no way the place of origin of the goods. The responde....
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....t been considered in the ruling given by the WBAAR in the instant case. Further, for the reasons stated hereinabove, the clarification provided in the context of the erstwhile service tax regime cannot be made applicable to the instant case. R. That it has also been stated that, at the time of actual delivery or even after accepting delivery of goods by the respondent, the customer may have the option to reject or return the goods. Consequently, the customer may also be entitled to seek refund where the customer had made prior payment of transportation charges. In such instances, the loss of transportation charges could be borne by the applicant, with or without any charge payable by the ECO. S. That it is submitted by the respondent that the loss of transportation charges would be borne by the respondent in case of rejection or return of the goods by the end customer. That this is not only self-contradictory but also sufficient to establish a composite contract involving delivery of goods purchased by the end customer in the e-marketplace. That the service of delivery can in no way be equated with provision of GTA service by the respondent. In the present case, t....
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....ling that the proposed model of the respondent would fall within the scope and ambit of GTA services. That the ruling may be modified by holding that the proposed model of provision of transportation services by the respondent to end customers cannot be classified as GTA services. 13. Accordingly, the appellant prayed the following before the Appellate Authority of Advance Ruling: a. Order No. 15/WBAAR/2025-26 dated 09.12.2025 passed by the West Bengal Authority for Advance Ruling may be set aside. b. The order no. 15/WBAAR/2025-26 dated 09.12.2025 passed by the West Bengal Authority for Advance Ruling may be modified accordingly and/or c. Pass any such further or other order(s) as may be deemed fit and proper in the facts and circumstances of the case. Submission of the Respondent before the WBAAAR 14. In its written submission made before the WBAAAR, the respondent inter alia submitted the following: i. The Appeal has been filed with a 29-day delay, for which no sufficient cause for condonation has been demonstrated, as mandated by Section 100(2) of the CGST/WBGST Act. The Department's explanation regarding the delay in obtaining the c....
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....nt of the transportation service. There is no requirement under law that a consignment note must necessarily be issued to the supplier of goods, nor is there any prohibition on issuing the same to the end-customer where such person contracts for transportation. The Appellant's reliance on the Explanation to Rule 4B of the Service Tax Rules, 1994 is wholly misplaced. The said provision merely prescribes the particulars to be contained in a consignment note and does not mandate that the same must be issued only to the supplier of goods. The Appellant is thus seeking to read into the provision an extraneous condition which does not exist, contrary to the judgment of the Hon'ble Supreme Court in Union of India vs. Inter-Continental [2008 SCC Online SC 22]. Para 5.6 - The Appellant has contended that a valid consignment note must necessarily contain particulars such as the registration number of the goods carriage and the place of origin, and has further alleged that the Respondent Applicant would not be in a position to know the exact vehicle details for each leg of transportation as multiple vehicles are involved in transportation. The aforesaid contention is misconceived and....
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....and is denied. It was, in fact, specifically clarified by the Respondent-Applicant before the Hon'ble AAR that no agreement exists between the Seller of goods and the Respondent-Applicant. The Respondent-Applicant is independently engaged by the end-customer for provision of transportation services. A specific query in this regard was even raised by the AAR during the hearing and this factual position was expressly brought on record by way of Written Submissions filed before the Hon'ble AAR. Para 6.2 - The Appellant has further contended that the common feature of an e-market ecosystem is the explicit or implicit arrangement to deliver the goods to the end-customer. Therefore, to state that the end-customer purchasing the goods is the recipient of GTA services would be a misplaced argument. The contention is misconceived and is denied. In the present case, the end-customer engages the Respondent-Applicant for transportation of goods and pays the transportation charges as per the Buyer Terms of Use ("TOU"). Accordingly, the end customer is the recipient of the transportation service. A separate tax invoice/ bill of supply for goods transportation services is raised by the Resp....
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.... is only a commercial arrangement agreed upon between the parties and does not, in any manner, determine or alter the nature or classification of the services rendered by the Respondent Applicant. In any event, the arrangement cannot be construed as a single or composite contract, as it comprises two independent supplies undertaken by different parties-namely, the supply of goods by the Seller and the provision of transportation services by the Respondent. It is a settled principle of law that the wisdom, prudence, or commercial expediency of a business arrangement must be judged from the perspective of the assessee. So long as the transaction is genuine and undertaken in the ordinary course of business, the authorities cannot substitute their own perception of how the business should have been conducted. [Ref: CIT Vs. Dalmia Cement Ltd. (2002) 254 ITR 377 (Del), Hero Cycles (P) Ltd. v. CIT (2015) 379 ITR 347 (SC)]. Para 7.1 to 7.3 - The Appellant has further contended that the transportation undertaken by Respondent-Applicant is akin to courier services, as it has features of door-to door delivery, time sensitivity etc. The contention is incorrect and is denied. The se....
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....rt of goods by road and issues a consignment note by whatever name called, but does not include (i) an electronic commerce operator by whom the services of local delivery are provided, (ii) an electronic commerce operator through whom the services of local delivery are provided." (ii) With effect from 22.09.2025, exclusion clause has been incorporated in the definition of GTA. The said amendment merely carves out an exclusion for a specific class of service providers i.e. a. Electronic Commerce Operators (ECOs) by whom local delivery services are provided; and b. Electronic Commerce Operators (ECOs) through whom local delivery services are provided. (iii) The exclusions introduced in the definition of "goods transport agency" are explicitly person-specific. In other words, these exclusions apply only to ECOs, by whom or through whom the services of local delivery are provided, and not to any other person. The term "electronic commerce operator" is defined under section 2(45) of the CGST Act. The essential requirement for an entity to qualify as an ECO is that the said person must own, operate or manage a digital or electronic fa....
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....e to the plain and strict meaning of the statute's language. (v) The exclusion clause in an Exemption Notification must be strictly interpreted. (vi) The Department is prohibited from reading or imposing additional conditions that are extraneous to the statute. (vii) The Tax Department is prohibited from acting in the capacity of a businessman. (viii) Other Advance Rulings on the matter. Personal Hearing 18. The personal hearing of the instant appeal was held on 30.04.2026. 19. In course of the hearing, the authorized representatives of the Respondent, in addition to reiterating their written submission made before the Appellate Authority, also provided the Appellate Authority with an explanation of their business model, way of functioning, responsibilities, and terms of arrangement with the Customer/Buyer, as they had previously submitted to the WBAAR authority and as mentioned in the preceding paragraphs. They further drew attention of the Authority to the "Buyer Terms of Use," highlighting the conditions the buyer has to adhere to in respect of the transporter, which is reproduced below: "By agreeing to the Terms of Use, you ....
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....of the consignment to be transported, issue a Consignment Note, which will also include the terms and conditions governing the carriage, in addition to the applicable Terms of Use mentioned herein. You are encouraged to refer to the additional terms and conditions set out in the Consignment Note, which shall be made available to you in your order page. The Transporter shall not be liable for any delay in pickup, mis-delivery, non-delivery or loss or damage to shipment caused on account of an act of God, force majeure productor any other cause reasonably beyond the control of the Transporter. Any time of arrival/delivery provided at booking by Flipkart is an estimate only and the Transporter has no role in providing such estimate. The Transporter shall not be bound by any time-commitments made by Flipkart to the customer." 20. The Joint Commissioner, State Tax, Large Taxpayer Unit, Govt. of West Bengal, who attended the hearing on behalf of the appellant, reiterated his submission as stated in the appeal. Discussions and Findings 21. At the outset we would like to address the prayer for condonation of delay made by the appellant. Having considered the subm....
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....mited to delivering the goods to the Source Mother Hub, after which the respondent assumes responsibility for collecting the goods and delivering them to the Delivery Address specified by the buyer/end-customer on the ECO portal. iii. The respondent claims to have a separate arrangement with the buyer/end-customer through the Customer's/Buyer's Terms of Use accepted at the time of placing the order. On that basis, the respondent submits that it is appointed by the buyer/end-customer as a Goods Transport Agency (GTA) for transporting the goods from the Source Mother Hub to the buyer's Delivery Address. iv. The transportation charges are stated to be payable by the buyer/end-customer, either through the ECO at the time of online purchase or directly to the respondent at the time of cash-on-delivery. The respondent also states that such transportation charges would be separately disclosed in the tax invoice or bill of supply issued to the buyer/end-customer. v. The respondent proposes to issue a single consignment note to the buyer/end-customer for the entire movement from the Source Mother Hub to the Delivery Address, notwithstanding multiple transit points....
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....ended)? 24. The findings and observations of the WBAAR may be briefly summarized as under: i. The WBAAR restricted its examination to the proposed activity of transportation of goods by road, as the respondent's application was confined to that issue. ii. The WBAAR noted that issuance of a consignment note is an essential requirement for classification as Goods Transport Agency (GTA) and that such issuance indicates transfer of lien/responsibility to the transporter till safe delivery. iii. The WBAAR observed that the respondent, being a company, qualifies as a "person" under Section 2(84) of the CGST Act, 2017. iv. The WBAAR recorded that, under the Buyer's Terms of Use, the buyer engages the transport service provider facilitated by the ECO, while the sale contract remains between seller and buyer only. v. The WBAAR noted that the respondent would provide transportation from the Source Mother Hub to the Delivery Address, and reverse transportation in case of return of goods. vi. The WBAAR observed that the transportation would be exclusively by road and that the respondent would issue a single serially numbered consignment ....
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....b, whereas the seller remains responsible for delivery up to that point. Therefore, the Source Mother Hub cannot be treated as the actual place of origin of the goods. iii. No agreement with the seller/consignor has been placed on record. The respondent relies only on an arrangement with the end customer through the Customer's/Buyer's Terms of Use. iv. The respondent contends that a consignment note is issued by a GTA upon receipt of goods from the consignor/supplier, whereby lien and responsibility over the goods are transferred to the transporter. Therefore, issuance of a document to the end customer cannot, by itself, qualify as a valid consignment note. v. The purported single consignment note does not capture essential details such as the registration number of all goods carriages used, including vehicles used for last-mile delivery, and therefore fails to satisfy the requirements applicable to a consignment note. vi. The use of bicycles, two-wheelers or electric-operated vehicles in last-mile delivery may not qualify as use of "goods carriage" within the meaning of the Motor Vehicles Act, 1988. vii. The end customer cannot be treat....
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....the consignment and not for a single vehicle. v. The respondent denied use of bicycles under the proposed model and submitted that neither the definition of GTA nor Entry 21A of the exemption notification mandates transportation specifically through a "goods carriage". vi. The respondent submitted that no agreement exists between the seller and the respondent. According to it, the end-customer independently engages the respondent for transportation under the Buyer's Terms of Use. vii. The respondent submitted that the end-customer is the recipient of transportation service, as the end-customer is liable to pay the transportation charges and a separate tax invoice/bill of supply is issued to him. viii. The respondent clarified that the Source Mother Hub is only the nearest pick-up point to the seller's location, and the seller is responsible for transporting goods up to that point at his own cost. ix. The respondent contended that its activity cannot be treated as a composite contract for supply of goods and delivery, as supply of goods by the seller and transportation service by the respondent are two independent supplies. x. Th....
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....ptance of delivery by the end customer is deemed to be confirmation that the transporter has completed its contractual obligations and that the consignment has been received in full and intact condition. viii. The transporter is described as a "Goods Transport Agency" under GST law and is stated to issue a "consignment note" for booking of the consignment. ix. The transporter is not liable for delay, mis-delivery, non-delivery, loss or damage caused by force majeure or reasons beyond its control. x. Any estimated delivery time given by the ECO is not binding on the transporter. 31. We have carefully considered the rival submissions made by the appellant and the respondent, both in their written submissions as well as during the course of personal hearing. We have also perused the impugned ruling passed by the WBAAR, the application filed before the WBAAR, the grounds of appeal, the reply filed by the respondent, the Buyer Terms of Use relied upon by the respondent, the sample consignment note, and the relevant statutory provisions, notifications, circulars and explanatory notes referred to by both sides. 32. We find that the following issues arise f....
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....rvice under Section 2(93) of the CGST Act, 2017. On the strength of the aforesaid arrangement, the respondent claims that the service supplied to unregistered end customers is exempt from GST under Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017, as amended. 35. The said contention was accepted by the West Bengal Authority for Advance Ruling in In re: Flipkart India Private Limited, Order No. 15/WBAAR/2025-26 dated 09.12.2025, wherein the proposed activity was held to be classifiable as GTA service and eligible for exemption when supplied to unregistered end customers. 36. At the outset, we note that the ruling of the Authority for Advance Ruling relied upon by the respondent was rendered on the basis of the proposed business model as represented before the said Authority. The findings recorded therein proceeded substantially on the contractual assertions made by the respondent, namely that the responsibility of the seller ends at the Source Mother Hub, that the end customer independently engages the respondent for transportation of goods, and that the respondent merely undertakes transportation of goods by road from the Source Mother Hub to the d....
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....reeing to the terms, and does not exercise any control over the mode, route, vehicle or manner of transportation. In such circumstances, the alleged contract between the end customer and an unidentified transporter lacks certainty as to the identity of one of the contracting parties. 42. It is a settled principle of contract law that a binding agreement arises only when there is consensus ad idem between clearly identifiable parties on essential terms. The Hon'ble Supreme Court in Rickmers Verwaltung GmbH v. Indian Oil Corporation Ltd. held that a contract can be said to be concluded only when correspondence demonstrates a clear meeting of minds on material particulars. Similarly, in Dresser Rand S.A. v. Bindal Agro Chem Ltd., the Court reiterated that absence of agreement on essential elements renders the contract non-existent in law. Further, the classical principle laid down in Cundy v. Lindsay establishes that mistake as to identity of the contracting party renders the agreement void ab initio. 43. Applying the above principles, it is evident that where the so-called "end customer" is merely informed that services will be provided by an unspecified "Transporter", without ....
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....signment note issued under such arrangement also loses its legal foundation. 47. Therefore, in view of the above legal principles, we find that the mere acceptance of standard Buyer Terms of Use containing a generic reference to an unidentified "Transporter" does not establish a concluded independent contract of transportation between the end customer and the respondent. Consequently, the respondent's claim that the end customer independently engages it as GTA, that the end customer is the recipient of GTA service, and that a valid lien is created in favour of the respondent by virtue of the alleged consignment note, cannot be accepted without further substantive evidence establishing certainty of parties, real consent and actual commercial arrangement. 48. In such circumstances, the mere recovery of an amount described as "GT Charges" or "transportation charges" from the end customer cannot, by itself, establish that the end customer has received an independent Goods Transport Agency service. Under Section 2(93) of the CGST Act, 2017, the recipient of service is the person liable to pay consideration for such service. However, the said provision cannot be read in isolation f....
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....t from the perspective of e-way bill compliance, since vehicle number is required to be updated before commencement of movement or during transit in case of change of vehicle. Therefore, where the document claimed to be a consignment note does not contain relevant vehicle details, or where such details are not properly reflected/updated in the corresponding movement documents, the document may suffer from material defect. Such defect is relevant for determining whether the service satisfies the essential conditions of GTA service. 54. We also find that CBEC, while issuing clarification on ancillary services and classification vide Circular No. 104/7/2008-S.T. dated 06.08.2008, specifically stated that a GTA service provider has to issue a consignment note for transportation of goods by road in a goods carriage. Thus, a conjoint reading of the GTA framework, the said circular, and Sl. No. 21A of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017, does not support the respondent's contention that transportation through a goods carriage is not required for claiming exemption under the said entry. On the contrary, the legal framework indicates that, for the purpose of GTA....
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....doorstep location. The operational arrangement is therefore directed towards fulfilment of an e-commerce order and not merely towards transportation of goods as understood in the context of GTA service. 59. Further, tracking, sorting, hub movement and transshipment are features ordinarily associated with organized courier/logistics networks. Such activities are designed to manage large volumes of parcels and packages through multiple nodes and delivery partners, culminating in door delivery to individual customers. 60. We also observe that assumption of responsibility till final delivery, though relied upon by the respondent as an incident of GTA service, cannot be viewed in isolation. In the facts of the present model, such responsibility forms part of an integrated e-commerce delivery/logistics obligation. The respondent's role is therefore not confined to road transportation simpliciter, but extends to organised logistics and fulfilment functions necessary for delivery of products purchased through the electronic platform. 61. Accordingly, we find that the activities undertaken by the respondent, when examined in substance, bear the essential characteristics of organize....
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....tomer is not the result of any conscious or informed contractual engagement. Rather, it is embedded within pre-drafted, standard-form terms imposed unilaterally by the platform, devoid of any real commercial negotiation. The so-called contract of transportation is therefore a mere legal fiction, created through contractual structuring, and does not reflect the substance of the transaction or the intention of the parties. The essential attributes ordinarily associated with a recipient of GTA services, such as privity, volition, and control, are conspicuously absent. 67. From the perspective of the customer, the transaction is understood as a single, composite supply, namely, the purchase of goods with assured doorstep delivery. The customer proceeds on the legitimate expectation that delivery is an integral and inseparable component of the purchase, and not a distinct or independently contracted service. 68. It is further pertinent to note that certain clauses embedded within the platform's standard terms, such as force majeure provisions, purport to shift the risk of loss onto the customer by deeming delivery to have been completed upon receipt of goods at the platform's logi....
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....point the transporter, negotiate freight, choose the route or mode of transportation, or exercise control over the movement of goods. iii. No actual or commercial delivery of goods takes place at the warehouse/source hub to the end customer. The alleged movement thereafter on account of the end customer is only a contractual fiction and is not supported by the real conduct of the parties. iv. Consequently, the end customer cannot be treated as having received an independent Goods Transport Agency service from the respondent. For treating the end customer as the recipient of such independent GTA service, it must first be shown that there exists a legally sustainable supply of transportation service by the respondent to such end customer. If the alleged contract of transportation between the end customer and the respondent is uncertain or not legally established, the foundation for treating the end customer as recipient of GTA service becomes invalid. Therefore, the end customer cannot be regarded as the recipient of such GTA service under Section 2(93) of the CGST Act, 2017 merely because an amount described as transportation/GT charges is recovered from him. ....