|
Case Title |
Liberty Translines |
|
Court |
Appellate Authority for Advance Ruling, Maharashtra |
|
Honorable Judges |
Member Rakesh Kumar Sharma and Member Sanjeev Kumar |
|
Citation |
2020 (9) GSTPanacea 13 HC Maharashtra MAH/AAAR/SS-RJ/26 /2020-21 |
|
Judgement Date |
17-September-2020 |
|
Council for Petitioner |
Mr Kishor Chaudhary |
|
Council for Respondent |
Not applicable |
|
In favour of |
Revenue |
|
Section |
Section 97, 100 and 101 of the CGST Act,2017 |
The Appellate Authority for Advance Ruling, Maharashtra bench of Member Rakesh Kumar Sharma and Sanjeev Kumar, held that the applicant can not charge GST at the rate of 12% under Forward Charge mechanism as a Goods Transport Agency (GTA).
FACTS OF THE CASE
The Applicant, M/s Liberty Translines, owner of various goods transport vehicles, is in the business of Road Transportation and registered as GTA under GST Laws. The service rendered by the applicant is classified under SAC 996791 which is covered under reverse charge.
Sometimes, the applicant functions as a mere Transporter of goods for which consignment note is issued by some other party which acts as GTA for that transaction. Here, applicant’s service gets classified under SAC 996511 for which scheduled rate of tax is Zero percent, Applicant now wants to opt for payment of GST at the rate of 12%, on forward charge basis and avail Input Tax Credit as permitted by Notification No 20/2017-Central Tax (Rate) 2017 dated 22 August, 2017. In Particular, there is a company named POSCO ISDC Pvt. Ltd which provides GTA service and has opted for GST payable on forward charge basis at 12%, by claiming the related ITC. Since POSCO does not have enough fleet of its own, it sub-contracts GTA service to the Applicant who provides the GTA service as a subcontractor.
The applicant raised the issue of whether the Applicant is actually asking whether they can charge GST at the rate of 12% under Forward Charge mechanism as a GTA, in terms of Notification No 20/2017-Central Tax (Rate) 2017 dated 22 August, 2017.
COURT HELD
The AAR ruled that applicants cannot issue another consignment note for the same goods and for the same transaction where consignment notes are already issued by POSCO. Hence the applicant, in respect of the subject transaction cannot be treated as a GTA and therefore cannot charge GST at the rate of 12% under Forward Charge mechanism as a GTA.
The other issue raised was whether POSCO would be eligible to claim credit of the 12% GST charged by the Applicant in its invoice under Forward charge mechanism. The proper person to raise this question would be POSCO and not the applicant. However, the AAR refrain from addressing the issue. The applicant challenged the AAR’s ruling before the AAAR on the grounds that the AAR failed to appreciate that a mere consignment note which is not even defined in the Act or in Rules of GST can not determine the classification and taxability of Service.
The AAAR consisting of Sanjeev Kumar and Rajesh Kumar Sharma upheld the ruling of AAR and said that the question which has been raised by the applicant is not pertaining to any of the matters mentioned in Section 97 (2) of the GST Act. In fact, the question raised is with respect to ‘procedure’ which the applicant wants to follow. Section 97(2), which encompasses the questions, for the ruling by AAR does not deal with the issue of procedures to be followed by applicants.
ANALYSIS OF THE JUDGEMENT
As per the above case we analyse that GTA cannot charge 12% GST under Forward Charge Mechanism.
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Liberty Translines
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AAAR Maharashtra
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