Advance Ruling No. KAR ADRG 13/2024 dated 21st May 2024 – M/s Karnataka Co-operative Milk Producers Federation Ltd.

Applicant:

  • M/s Karnataka Co-operative Milk Producers Federation Ltd. (GSTIN: 29AAAAK1110G4Z4)
  • Represented by: Sri N Lokesh Reddy, C A & Authorised Representative

Issue:

  • The applicant sought an advance ruling on whether services provided by individual truck owners for the transport of raw materials and finished goods, including loading and unloading, are liable for GST.

Facts:

  1. The applicant is engaged in the manufacture of cattle feed and hires transporters through a tender process for transporting raw materials and finished goods.
  2. Most transporters are individual truck owners who do not issue consignment notes but submit invoices monthly.

Applicant’s Argument:

  • The applicant contended that since individual truck owners do not issue consignment notes, they should not be classified as Goods Transport Agencies (GTA) and thus should not be subject to GST under the reverse charge mechanism (RCM).

Legal Provisions Considered:

  1. Section 9(3) of CGST Act, 2017 – Allows the government to notify categories of supply subject to RCM.
  2. Notification No. 13/2017-Central Tax (Rate) – Specifies that services provided by a GTA are liable under RCM.
  3. Definition of GTA in Notification No. 12/2017-Central Tax (Rate) – A GTA is defined as any person who provides service in relation to transportation of goods by road and issues a consignment note.

Ruling:

  • The Authority ruled that the individual truck owners providing transport services are considered GTAs if they issue any document containing necessary details, even if not termed as a consignment note.
  • Since the transporters carry e-way bills and invoices, which include transport details, they qualify as GTAs.
  • Therefore, the services provided by these individual truck owners are liable for GST under the reverse charge mechanism (RCM) as per Notification No. 13/2017-Central Tax (Rate).

Key Notifications and Provisions Referenced:

  1. Notification No. 13/2017-Central Tax (Rate) dated June 28, 2017, as amended.
  2. Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017, as amended.

This summary outlines the decision made by the Karnataka Authority for Advance Rulings regarding the GST applicability on transportation services provided by individual truck owners to Karnataka Co-operative Milk Producers Federation Ltd. The services are subject to GST under RCM if transporters issue relevant documents, categorizing them as GTAs.

The detailed Advance Ruling can be downloaded here