TaxTMI 
TaxTMI 
2026 (9) TMI 1733
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.... unless the applicant or the appellant has been given an opportunity of being heard. 2. Under Section 103(1) of the CGST Act, 2017 and the RGST Act, 2017, this Advance Ruling pronounced under Chapter XVII of the Acts shall be binding only: (a) on the applicant who had sought it in respect of any matter referred to in Section 97(2) of the Acts; and (b) on the concerned officer or the jurisdictional officer in respect of the applicant. 3. In terms of Section 103(2) of the CGST Act, 2017 and the RGST Act, 2017, this Advance Ruling shall be binding unless the law, facts or circumstances supporting the original ruling have changed. 4. Under Section 104(1) of the CGST Act, 2017 and the RGST Act, 2017, where the Authority finds that the Advance Ruling has been obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab initio and thereupon all the provisions of the Acts or the Rules made thereunder shall apply to the applicant as if such Advance Ruling had never been made. 5. Any appeal against this Advance Ruling shall lie before the Appellate Authority for Advance Rul....
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....han. The Applicant, in the course of providing the aforementioned services, issues consignment notes in respect of each consignment of coal undertaken for transportation. 4. That, in view of the aforesaid business and the manner in which the Applicant's services are rendered, the Applicant is entertaining a bona fide doubt as to i. Whether the services in relation to the transportation of goods supplied to M/s Mahesh Transport, Gujarat (GSTIN: 24AIMPG0917C1ZS) by the Applicant, being a Goods Transport Agency, are exempt in terms of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017? ii. If no, whether the services in relation of transportation of goods to be provided by the Applicant are taxable as per Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. 5. That, in order to obtain certainty in the matter and to ensure due compliance with the provisions of the CGST Act, 2017, the RGST Act, 2017 and the Integrated Goods and Services Tax Act, 2017, the Applicant is constrained to approach this Hon'ble Authority for an Advance Ruling under Section 97 of the CGST Act, 2017 read with Rule 104 of the CGST Rules, 2017. B. INTERPRETATIO....
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....ion to transport of goods by road; (ii) Issuance of consignment note by the GTA; (iii) Activity is performed by a GTA for another; and (iv) Activity is performed for consideration. 27. It cannot be doubted that the first condition with regard to both pre-negative list and the post-negative list is satisfied since RMC has been transported by the Applicant using transit mixers of the Applicant by road. The second condition relating to issuance of consignment note by GTA in the pre-negative list period and the post-negative list period is also satisfied as the Applicant had issued the consignment notes. The third condition in the post-negative list period is that the activity should be performed by the GTA for another. It cannot be doubted that the Applicant has undertaken the transportation of RMC for the mine owners. The fourth condition of the post-negative period is that the activity should performed for a consideration. It cannot also be doubted that the Applicant is receiving consideration from the service recipient as is clear from the invoices raised by the Applicant to the service recipient. Thus, the Applicant has been rendering G....
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....s are not exempt from the levy of tax and thus are taxable. 6. Additionally, Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 prescribes the rates of tax on the intra-State supply of services the same was amended by Notification No. 15/2025-Central Tax (Rate). Heading 9965 of the said Schedule pertains to "Goods Transport Services". The said heading covers, inter alia, services by way of transportation of goods by road, by rail, by air, by vessel, etc. Within the said heading, Serial No. 9(iii) specifically deals with "Services of goods transport agency (GTA) in relation to transportation of goods (including used household goods for personal use)". That a Goods Transport Agency by making a declaration under Annexure-V appended to Notification No. 11/2017 Central Tax (Rate) has the option to either pay tax under forward charge at rate of 18% with input tax credit or pay tax under reverse charge at the rate of 5% without input tax credit. That the applicant has exercised the option to pay tax at the rate of 18% under forward charge for the F.Y. 2026-27. A copy of the Notification No. 11/2017-Central Tax (Rate) along with 15/2025-Central Tax (Rate) and a copy of Anne....
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.... the transportation services and desirous to issues consignment notes for each consignment transported, thereby acting as a Goods Transport Agency in accordance with the provisions of the GST law. • In the above factual and legal background, the Applicant seeking an Advance Ruling under Section 97 of the CGST/RGST Act, 2017 on the following questions: (i) Whether the transportation services provided by the Applicant (M/s Mahesh Transport Company GSTIN: 08ABAFM4301M2ZC), being a Goods Transport Agency, to M/s Mahesh Transport Gujarat (GSTIN: 24AAMFG0917C1Z5), another Goods Transport Agency, for transportation of coal by road, are exempt from GST under the provisions of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended. (ii) If the aforesaid services are not eligible for exemption, whether such services are liable to GST under Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended, and if so, the applicable rate of tax and the person liable to discharge the tax. Commentary on the Actual Nature of the Transaction The true nature of the transaction is that the Applicant, M/s Mahesh Transport Company (GSTIN: 0....
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....s service in relation to transport of goods by road and issues consignment note, by whatever name called. The above definition contains two indispensable statutory conditions, both of which are mandatory: 1. the supplier must provide services in relation to transportation of goods by road; and 2. the supplier must issue a consignment note in respect of such transportation. Unless both conditions coexist, the supplier cannot be regarded as a Goods Transport Agency for the purposes of GST. I. Legislative Intent Behind the Definition The Legislature has consciously distinguished between- • an ordinary transporter or truck owner; and • a Goods Transport Agency. Every transporter carrying goods by road does not become a GTA merely because transportation is undertaken. A transporter becomes a GTA only when he assumes the legal responsibility of transportation by issuing a consignment note, thereby accepting custody and responsibility of the goods during transit. The CBIC has also clarified that issuance of a consignment note is the sine qua non for treating a supplier as a Goods Transport Agency. Individual truck operators or ....
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....responsibility of the goods. In such cases- • no consignment note is issued; • transporter does not assume custody; • transporter merely rents vehicles; • service is not GTA service. (B) Goods Transport Agency Where the transporter- • accepts goods for transportation; • issues consignment note; • undertakes delivery; • remains responsible during transit. Such supplier qualifies as a Goods Transport Agency. Therefore, issuance of consignment note is the decisive factor distinguishing GTA from an ordinary transporter. LEGAL COMMENTARY ON THE IMPERMISSIBILITY OF ISSUANCE OF PARALLEL CONSIGNMENT NOTES BY TWO GOODS TRANSPORT AGENCIES I. Nature and Legal Character of a Consignment Note The statutory recognition accorded to a Goods Transport Agency ("GTA") under Paragraph 2(ze) of Notification No. 12/2017-Central Tax (Rate) is founded upon the issuance of a consignment note. The issuance of a consignment note is not merely a procedural requirement but constitutes the legal acknowledgment by the transporter that it has accepted custody of the goods for transportat....
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....e of multiple consignment notes by different GTAs for one uninterrupted movement of goods is inconsistent with the legal character of a consignment note. V. Rule 54(3) Contemplates One Transporter for One Contract of Carriage Rule 54(3) of the CGST Rules, 2017 prescribes the particulars to be contained in a consignment note, including- • name of consignor; • name of consignee; • registration number of the goods carriage; • place of origin; • place of destination; • person liable to pay GST. The statutory framework proceeds on the assumption that the consignment note records one identifiable contract of carriage undertaken by one Goods Transport Agency. The Rule does not envisage multiple GTAs independently issuing consignment notes in respect of the same transportation assignment. VI. Commercial Practice in the Logistics Industry Where one logistics contractor engages another transporter for execution of transportation, the actual transporter ordinarily performs transportation under the principal carrier's transportation contract. The subcontracted transporter may issue freight bills....
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....PLICANT AND M/S MAHESH TRANSPORT GUJARAT A. Substance of the Arrangement The Applicant respectfully submits that the transaction between the Applicant and M/s Mahesh Transport Gujarat (GSTIN: 24AAMFG0917C1Z5) is required to be examined on the basis of its true commercial substance and not merely by the description employed in the agreement. Although the Applicant owns and operates a fleet of goods vehicles, under the present arrangement the Applicant does not independently undertake the transportation of goods as a Goods Transport Agency. Rather, the Applicant merely places its trucks, together with drivers wherever required, at the disposal of M/s Mahesh Transport Gujarat for execution of the transportation contracts entered into by the latter with its customers. The transportation contract with the consignor/customer remains exclusively between M/s Mahesh Transport Gujarat and its client. The Applicant has no privity of contract with the consignor, consignee or the owner of the goods. B. Legal Responsibility for Transportation The essential characteristic of a Goods Transport Agency is that it accepts goods for carriage and assumes legal responsibility for their safe ....
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....Applicant, on the other hand, merely provides transport vehicles for execution of the transportation work and does not independently contract with the owner of the goods. E. Applicant Does Not Render Independent GTA Services The Applicant neither: • accepts goods from the consignor; • contracts with the owner of the goods; • undertakes delivery to the consignee in its own right; nor • issues any consignment note. Accordingly, the Applicant cannot be regarded as independently supplying Goods Transport Agency services in relation to the said transportation. The Applicant merely provides transportation capacity in the form of trucks to M/s Mahesh Transport Gujarat (GSTIN: 24AAMFG0917C1Z5), which remains solely responsible for the transportation contract. F. Principle Against Parallel Consignment Notes The statutory framework governing Goods Transport Agencies proceeds on the basis that one transportation contract is evidenced by one consignment note issued by the transporter who assumes legal responsibility for the goods. The GST law nowhere contemplates the existence of two parallel consignment notes issued by t....
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....or movement of coal by road. It is M/s Mahesh Transport Gujarat which undertakes the transportation obligations towards such customers. The Applicant has not produced any independent transportation agreements entered into with the consignors or consignees of the goods. No material has been produced to demonstrate that the Applicant independently contracts with the owners of the goods, assumes responsibility for safe carriage or undertakes delivery in its own right. On the contrary, the available records indicate that the Applicant merely makes available its transport vehicles for execution of transportation assignments undertaken by M/s Mahesh Transport Gujarat. III. Absence of Independent GTA Activity Although the agreement seeks to describe the Applicant as a Goods Transport Agency, the agreement itself cannot determine the classification of services under the GST law. The statutory definition of Goods Transport Agency under Paragraph 2(ze) of Notification No. 12/2017-Central Tax (Rate) requires a person to undertake transportation of goods by road and issue a consignment note. The Applicant has failed to establish by documentary evidence that it independently undertakes....
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....he exemption, the following conditions are satisfied: (i) The Applicant provides a means of transportation of goods, namely goods carriages/trucks. (ii) The trucks are supplied on hire, ( NOTABLY TERMED AS GTA IN AGREEMENT) (iii) The recipient of the service is M/s Mahesh Transport Gujarat, which is a registered Goods Transport Agency. (iv) The hired vehicles are utilised by the recipient M/s Mahesh Transport Gujarat, for transportation of goods in the course of its GTA business. Accordingly, the transaction squarely falls within the scope of Entry No. 22(b). VII. Principle of Classification Based on Substance Under GST, classification of a supply is determined on the basis of its real commercial character. Merely describing a transaction as a GTA service in a private agreement cannot alter its true legal character. Where the supplier merely places transport vehicles at the disposal of another Goods Transport Agency and the transportation contract continues to remain with the recipient GTA, the supply is appropriately classifiable as giving on hire a means of transportation of goods. Such services are specifically recognised and exemp....
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....ropriate action in accordance with law. The above comments are hereby respectfully submitted for the kind perusal of the Hon'ble Authority for Advance Ruling and for being taken on record and considered in the on-going proceedings arising out of the present Advance Ruling application. Report From the office of Additional Commissioner, State Tax, Enforcement Wing-III, Rajasthan, Jaipur A letter was written to the additional Commissioner (Administration) Enforcement Wing-3rd, Jaipur regarding information of proceedings on the applicant vide letter No. F.05/Report/AAR/State/2026-27/374 dated 20.07.2026. The reply received vide letter No. 850 dated 23.07.2026 are as follows:- The survey report along with the present status report received in original from the Proper Officer-Assistant Commissioner, Circle-B-I, Enforcement Wing-III, Rajasthan, Jaipur-is enclosed herewith for your record and perusal. This information is being placed before the Hon'ble Authority for necessary consideration in terms of the 1st Proviso to Section 98(2) of the RGST / CGST Act, 2017. With reference to the subject cited above, it is humbly submitted that an investigation/proceeding is curren....
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....proceeding is undergoing on the applicant. In the matter Mr. Ranjan Mehta Advo., Gaurav Jangir Advo., Vaidik Sharma Advo. Authorized Representative appeared for personal hearing. They argued that the matter pending under investigation is different form the question raised by the applicant before this authority. They also submitted a copy of Order dated 10.12.2025 passed by the Joint Commissioner, Business Audit-V, Circle-B, Rajasthan State Tax, Jaipur for the tax period April 2021 to March 2022, in pursuance of show cause notice bearing Reference No. ZD080925080178W dated 29.09.2025 arising out of audit para No. 7 (Non-reversal of ITC on exempted supply). By the said order, input tax credit of Rs. 14,72,392/- (CGST Rs. 7,36,196/- + SGST Rs. 7,36,196/-) availed by the applicant on invoices issued by M/s Deepak Motors was held to be inadmissible, upon the finding that M/s Deepak Motors, having merely supplied its vehicles to the applicant and not having issued any consignment note, was not a Goods Transport Agency and that its supply was an exempt supply; interest of Rs. 9,93,864/- and penalty of Rs. 1,47,240/- under Section 73(9) were also ordered. F. DISCUSSIONS AND FINDINGS ....
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....with status report of the Proper Officer, Assistant Commissioner, Circle B-I, Enforcement Wing-III, that an investigation/proceeding is presently pending against the applicant, the particulars of the same are as under:- (a) a search under sub-section (2) of Section 67 of the RGST Act, 2017 was conducted at the applicant's business premises on 07.01.2026 in pursuance of FORM GST INS-01 bearing Reference No. ZD080126009915D dated 06.01.2026, in Case ID AD080126003879W; (b) the applicant, though registered as a Goods Transport Agency, hires goods transport vehicles/means of transportation from other Goods Transport Agencies and vehicle providers, and has availed and utilised input tax credit of the tax charged by such vehicle providers on their invoices for hiring services; (c) such inward supply being, in the view of the investigating authority, exempt under Entry No. 22(b) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, the credit so availed is held to be ineligible under Section 17 of the RGST/CGST Act, 2017; (d) the applicant is also engaged in giving its own means of transportation on hire to other Goods Transport Agencies,....