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THE JHARKHAND GOODS AND SERVICES TAX ACT, 2017. Advance Ruling
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Body Advance Ruling Order No. JHR/AAR/2021-22/03/04, Dated 09th July, 2021

JHARKHAND AUTHORITY OF ADVANCE RULING

GOODS AND SERVICES TAX

DIVISIONAL OFFICE OF STATE TAX, CIVIL COURT COMPOUND,

NEAR JAIPAL SINGH STADIUM, RANCHI, 834001 JHARKHAND

Sri Pradhuman Badri Prasad Meena,

Additional Commissioner,

Office of the Pr. Commissioner, CGST

and CX Audit Commissionerate,

Ranchi - Jharkhand.

Member (Central Tax)
Sri Ram Chandra Prasad Barnwal,

Joint Commissioner (Administration),

Ranchi Division, Ranchi- Jharkhand.

Member (State Tax)
Name and address of the applicant M/ s. BGR Mining & Infra Limited,

Registered Address: Amaghata, Govindpur, Dhanbad, Jharkhand - 826005, India.

Correspondence Address: H No. 8-2-596/R, Road No. 10, Banjara Hills, Hyderbabd - 34, India.

GSTIN of the applicant 20AAECB5497R1Z5
Application No. and Date Advance Ruling/ SGST & CGST/2020-21/AR/ AD200121000560C dated 13/01/2021.
Clause(s) of Section 97(2) of ((CGST/SGST/UGST)) Act, 2017 under which the question(s) raised (a) classification of any goods or services or both;
Date of Personal hearing 05-03-2021 & 10-03-2021.
Present for the applicant 1.Sri Vipin Verma, Advocate;

2.Sri. N. Vijaya Sai reddy, Authorised Signatory.

Note: Under Section 100 of the JGST Act 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of JGST Act 2017, within a period of 30 days from the date of service of this order.

PROCEEDINGS

(Under sub-section (4) of Section 98 of Central Goods and Service Tax Act, 2017 and the Jharkhand Goods & Service Tax Act, 2017)

The present application has been filed under Section 97 of the Central Goods and Services Tax Act, 2017 and the Jharkhand Goods and Services Tax Act, 2017 [hereinafter referred to as "the CGST Act and JGST Act"] by BGR Mining & Infra Limited, Amaghata, Govindpur, Dhanbad, Jharkhand-826 005 [Correspondence address - H. No. 8-2-596/R, Road No. 10, Banjara Hills, Hyderabad-34], the applicant, seeking an advance ruling in respect of the following questions:-

    (a) Whether the activity of transportation of coal from the mine to the railway siding at Pakur, till the time the railway siding is made operational at the mine, is an independent activity or part of supply of mining service?

    (b) If the provision of transportation of coal is an independent activity, whether exemption is available to the applicant as 'transportation of goods by a person other than GTA'?

    (c) Whether the applicant is liable to pay GST under RCM on the transportation services received from the transporters, as they are not issuing consignment note?

2. At the outset, we would like to make it clear that the provisions of both the CGST Act and the JGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the JGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act/JGST Act would be mentioned as being under the "GST Act".

HEARING

3. The case was taken up for preliminary hearing on 08/09.02.2021 with respect to admission or rejection of present application wherein Shri Vipin Verma, Advocate along with others appeared and made submissions as per contentions made in Application for Advance ruling. The application was admitted being questions related to classification and called for final hearing on 05.03.2021. Shri Vipin Verma, Advocate and Shri N. Vijaya Sai Reddy, Authorized Signatory appeared and made oral and written contentions as per details in their application.

OBSERVATIONS

4. We have gone through the facts of the case, documentary evidences like copies of agreements, invoice/bill, transporting papers and written submission made by the applicant. We find that the applicant is registered under Goods and Services Tax ('GST') Act, 2017. As per their submission they are engaged in the business of execution of infrastructure projects and mining of coal. They have submitted, among others, that,-

    (i) A Coal Mining Agreement (CMA) has been entered between The West Bengal Power Development Corporation Ltd (WBPDCL) and M/s Pachhwara Coal Mining Private Limited (PCMPL) for development & operation of Pachhwara North Coal Block and deliver coal to WBPDCL in accordance with the Mining Plan. PCMPL is a special purpose vehicle (SPV) and is the Mine Developer and Operator (MDO). As per the terms of the CMA, PCMPL has to remold the over burden and extract the coal from the mine. PCMPL is also required presently to transport the extracted coal from the mine to the railway siding at Pakur, Jharkhand and load onto railway rakes for delivery to WBPDCL till the time the railway siding is extended upto mine location. The distance between the mine and railway siding at Pakur is about 55 Kms (one way).

    (ii) As per CMA, WBPDCL shall pay to PCMPL the mining charge @Rs. 619.20 per ton of coal delivered at the delivery point(s). Further CMA provides that WBPDCL shall pay Transportation & Handling Charges @Rs. 154.80 per ton of coal transported by PCMPL from the mines to the railway siding at Pakur and loaded onto railway rakes at the railway siding.

    (iii) The transportation activity undertaken by PCMPL is only a temporary activity for the initial period of 5 years and the same would be terminated after the railway siding is constructed/extended to the mine location, post which the charge out rates for the transportation services to the delivery point located within the mine would be re-visited/re-determined.

    (iv) Pursuant to receipt of the contract from WBPDCL, PCMPL has sub contracted the entire work i.e. removal of overburden, extraction of coal, storage & handling and the temporary transportation of coal to the designated delivery points to the applicant on back to back basis by entering into an Operation and Maintenance (O&M) Agreement dated 12th December 2018.

    (v) As per O&M agreement, PCMPL shall pay Rs. 569.66 per ton towards base mining charge and Rs. 142.42 per ton towards Transportation & Handling Charges to the applicant. In the O&M agreement the mining charges for extraction of coal from the mines and transportation & handling charges for transportation of coal from the mine to the railway siding at Pakur and loading onto railway rakes is agreed separately.

    (vi) For the purpose of transportation of coal from the mine to the railway siding at Pakur, the applicant is availing transportation services from truck owners/operators (transporters). However, the transporters are not issuing consignment note or any similar document to the applicant towards transportation of coal from the mine to the railway siding.

    (vii) As per terms of contracts, the transporters deploy the trucks alongwith drivers at the mine for transportation of coal from the mine to the railway siding. The applicant installs tracking equipment and monitor the movement of such trucks deployed by the transporters during the contract period.

    (viii) The procedure adopted by the applicant for transportation of extracted coal from the mine to the railway siding (delivery point of WBPDCL) and documents issued for the said transportation are as follows,-

    1 Specified vehicles deployed by the transporters are issued with loading slip and gate pass to enter into the mine
    2 Vehicles enters the mine pit-head for loading of coal
    3 Loaded vehicle enters the weighbridge for weighment and weight details are entered in the loading slip and handed over to the vehicle operator
    4 Vehicle drivers returns the loading slip at mine exit check-post and are issued a Transport Challan in Form-D [Mines & Minerals (Development & Regulations) Act 1957] generated by WB PD CL for payment of royalty and Delivery Challan issued (under Central Goods and Services Tax Act, 2017) by the applicant for movement of goods
    5 Once the vehicle reaches the railway siding, weighment is done by WBPDCL and weighment challans are issued at the railway siding. Thereafter, unloading and loading on railway rakes is being undertaken by the applicant.

    (ix) The applicant is not engaged in the business of transportation of goods, not registered as Goods Transport Agency and not issuing consignment note or any similar document to PCMPL in respect of the transportation of coal from the mine to the railway siding at Pakur as per the terms of the O&M agreement.

ANALYSIS AND FINDINGS

5. We have carefully considered the submissions made by the applicant in the application and during personal hearing fixed in this regard. We find that the question before us essentially pertains to classification of the services and rate of tax applicable on supply of such services and also on determination of liability to pay tax. We observe that the issue before us is squarely covered under Section 97(2) (a) of the GST Act and, therefore, we admit the application for consideration. We have given a careful consideration to the arguments adduced by the applicant at the time of personal hearing as well as to their written submission including other documents submitted before us.

6.1 The applicant in relation to their Question No. (a) argued that the mining services of coal provided by them and transportation of mined coal to railway siding are two different services and these two services do not fall under the purview of composite supply or mixed supply under CGST Act, 2017.

6.2 Having duly considered the arguments put forth by the applicant, we are satisfied that both the services are independent of each other. The price charged by the supplier for both the services are separately mentioned in the contract held in this regard. The bills/invoices are also separately raised in this regard. Moreover, none of the services can be considered as predominant over the other service. Both the services are important for the service recipient and accordingly invited tender and held contract for availing both the services. These services in any way cannot be considered as naturally bundled services as order of both the services can be awarded to separate service providers. Also they are not supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply nor are these services supplied made in conjunction with each other for a single price.

6.3 Accordingly, considering the arguments submitted by the applicant with documentary evidences and reliance placed by them in a series of case laws, including ruling of Hon'ble Supreme Court in the case of CCE Raipur Vs Singh Transporters, with respect to question of classification in identical issues, we find that answer to question No. 1 is affirmative in as much as that transportation of coal from pit-head of the mine to railway siding is an independent activity.

7.1 Question No. (b) raised by the applicant is that if the transportation is independent activity, whether exemption is available to the applicant as transportation other than GTA. Since first part of this question has been replied supra in affirmative, now the issue before hand to decide is as to whether or not the exemption is available to the applicant (i.e. BGR) as transportation other than GTA.

7.2 To arrive at a conclusion, the applicant has submitted sample Tax Invoice dated 15.09.2020 with respect to mining charges raised to PCMPL (under heading Bill to Party) having work description as Despatch of coal from Pachhwara (North) Coal Mine, Amrapara to WBPDCL Railway Siding, Pakur showing CGST @9% and SGST @9%. They have also submitted separate Bill of Supply dated 15.09.2020 with respect to coal transport charges raised to M/s PCMPL having work description as Despatch of coal from Pachhwara (North) Coal Mine, Amrapara to WBPDCL Railway Siding, Pakur showing CGST @0% and SGST @0%.

7.3 Operation & Management Agreement dated 12.12.2018, held between PCMPL and the applicant, has also been submitted. The said agreement dated 12.12.2018 made it clear in the first place that PCMPL and the applicant (BGR) are separate companies duly incorporated and registered under the Companies Act 2013. With regard to Mining Charges, at Para 11.2 of the agreement it has been found agreed upon, among others, that,-

    (i) The mining charges payable to the applicant shall be Rs. 569.66 per ton (the base mining charge) and Transportation & Handling charge of Rs. 142.42 per ton, which is arrived after deducting 8% mark-up from the gross price payable by WBPDCL for the respective activities.

    (ii) Presently as per the CMA the Transportation & Handling Charges shall be payable for the period during which the Delivery Point is the Railway Siding at a distance about 55 KMs from the mine.

    (iii) The Transportation & Handling Charges are to be reviewed by WBPDCL in the 5th year of the Contract Period based on the progress of the extension of the Railway Siding to the Mines. The Transportation & Handling Charges are to be reviewed by WBPDCL based on the revised distance of the extended Railway Siding from the mine.

    (iv) The prolusions relating to Mining Charges and Transportation Charges as contained in Article 27 of CMA shall apply mutatis mutandis subject however to deduction of 8% markup on the Gross Value.

    (v) The applicant shall within the 2nd day of each month (or, if such day is not a Business Day, the immediately following Business Day), submit to PCMPL, Tax Invoice in the agreed form along with the documents as required under Article 28 of CMA (the "Invoice" for the charges payable under this Agreement.

(vi) PCMPL shall, on receipt of the Invoice, from the applicant, submit the Invoices to WBPDCL. In accordance with the provisions of the applicable law (including the Central Goods and Services Tax Act, 2017 and/or the State Goods and Services Tax Act, 2017), the invoices shall be in the format acceptable to WBPDCL and will include taxes as per Applicable Laws. PCMPL shall after receipt of the corresponding payment from WBPDCL release the payment to the applicant after deducting 8% markup from the gross value of the mining charge & transportation charge invoices submitted to WBPDCL.

7.4 Under the above circumstances agreed by the applicant and PCMPL, we find here pertinent to briefly revisit submissions of the applicant regarding transportation activity. The applicant has submitted that PCMPL is also required by WBPDCL to transport the extracted coal from the mine to the railway siding against payment of agreed upon rate; that pursuant to receipt of the contract from WBPDCL, PCMPL has sub contracted the entire work including transportation of coal to the designated delivery points to the applicant against payment of agreed upon rate; and that for the purpose of transportation of coal from the mine to the railway siding, the applicant is availing transportation services from truck owners/operators (transporters) against payment of agreed upon rate.

7.5 A plain reading of above discussed agreement held between the applicant and PCMPL made it clear that the applicant is making an "outward supply" as defined under Section 2(83) of the GST Act 2017. They are making outward supply of support to PCMPL in as much as the applicant is arranging transporters of coal from the mine pit head to the railway siding and, therefore, it is a kind of supplying support service similar to the accepted support service for extraction of the mineral for which the applicant is paying GST. Thus the activity undertaken by the applicant is a 'Service' under CGST Act, 2017 for supply of which they are charging a separate consideration. Section 2(102) of the CGST Act 2017 defines services as following -

    (102) "services" means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged;

7.6 Applicant has also submitted that in such cases they cannot be termed as GTA. It is an accepted fact, in general, that there cannot be two GTAs for single transportation activity & there cannot be two consignment notes for the same goods, i.e., coal in the instant case. However, it is evident from rate clause of agreements/work orders of the applicant with transporters and with PCMPL read with invoices/bills issued in this regard that there is value addition in the service of transportation at every stage. Moreover, the applicant is not acting like an "agent" as defined under Section 2(5) of the GST Act 2017 nor a partner of PCMPL as is evident from para 32.1 of the agreement with PCMPL which clearly states that,-

    (i) No provision of this Agreement shall be deemed to constitute a partnership or joint venture between the Parties.

    (ii) No provision of this Agreement shall constitute either party as the legal representative or agent of the other, nor shall either party have the right or authority to assume, create or incur any liability or any obligation of any kind, express or implied, against, or in the name of, or on behalf of the other Party.

7.7 Further, the said agreement dated 12.12.2018 made it clear that PCMPL and the applicant (BGR) are separate companies duly incorporated and registered under the Companies Act 2013. Thus the entire business between the applicant and PCMPL has been held on principal to principal basis for an agreed "consideration" as defined under Section 2(31) of the GST Act 2017. It can be safely concluded that the applicant would be considered as supplier of support services to its customer, i.e., PCMPL by way of arranging transportation of goods including resultant activities like coordinating with the logistics team of recipients of service, managing the transport vendors and ensuring timely delivery of the consignment to the consignee, arranging further transportation in case of break-down of the vehicle, assuming end to end responsibility of transporting the goods to the desired location, etc.

7.8 Since the applicant themselves cannot be termed as GTA for the reasons discussed supra, then the support in transport services provided for a consideration by the applicant would be covered by other supporting transport services (Heading 996793) and covered under Entry 11 (ii) of the Notification No. 11/2017-C.T. (Rate) dated 28.06.2017 & would be chargeable to GST at 18% (CGST 9% + SGST 9%) after appropriate valuation of the service. The relevant entry has been reproduced below for ready reference.

Sr. No. Chapter, section or heading Description of service Rate (per cent) Condition
11 Heading 9967 (Supporting services in transport) (ii) Supporting services in transport other than (i) above. 9 -

8.1 Question No. (c) raised by the applicant is as to whether the applicant is liable to pay GST under RCM on the transportation service received from transporters as they are not issuing consignment notes. As mentioned under Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 (as amended from time to time) "Goods Transport Agency" (GTA) means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called. We find that, a consignment note is a document issued by a GTA against the receipt of goods for the purpose of transporting the goods by road in a goods carriage. Where a consignment note is issued, it implies that the lien on the goods has been transferred and the transporter of the goods becomes responsible for transportation of the goods till its safe delivery to the recipient. In such a situation, consignment note or any other document, by whatever name called, is simply a document showing the responsibility of the transporter and the rights of the persons for whom the goods are transported. By implication, it means that the transporter undertakes the responsibility to transport the goods and promises safe delivery of the goods at the destination. A consignment note is only a document by which the responsibilities and rights are reduced in writing and, therefore, existence or for that matter, absence of the said document cannot have any adverse effect on the responsibilities or rights as agreed between the parties.

8.2 We find in this regard that when a person who provides service in relation to transport of goods by road and the lien on the goods has been transferred and the transporter of the goods becomes responsible for the transportation of the goods till safe delivery to the consignee, he essentially undertakes the responsibility cast upon a goods transport agency and the consignee or consignor of the goods, whom the services are provided, gets certain rights which can be exercised against the transporter in respect of transportation of the goods. In such a situation, ideally the transporter issues a document called consignment note or LR/GR etc. The document may be called anything but the rights and responsibilities of the parties are governed by such document in the common trade practice. We find here pertinent to go through the documents relied and submitted by the applicant. The applicant while extending their argument submitted sample Work Order Ref: BGR/PCH/WO/2020-21/CT-019 dated 01.07.2020 held between them and one of their transporter M/s Dinanath Transport. As per the said Work Order following conditions, among others, are found agreed upon by the applicant and transporter,-

    (i) Both parties shall be responsible for providing adequate security measures to prevent any theft and pilferage of coal during transportation of coal from Pachhwara North Coal Mine to Pakur Railway Siding.

    (ii) The coal in each truck shall be measured on weight bridge located at pit head stock yard and at delivery point Pakur railway siding. The weighment done at delivery point Pakur railway siding shall be considered for payment purpose. The measurement for every truck load of the coal transported and delivered at Pakur Railway Siding shall be certified & approved by Incharge of the applicant.

    (iii) All monthly payments will be cleared on monthly basis, subject to reconciliation of quantities and certification by the applicant, the decision of applicant in certifying the quantity of work done is final.

    (iv) Penalty for shortfall quantity on Monthly Target has also been agreed upon as follows, -

    Shortfall in Agreed Quarterly Target Penalty to be imposed on the transporter by the applicant
    100% to 80% 5% of Transportation Rate on the shortfall quantity
    Below 80% Termination of Work Order with Notice to Transporter & Approval from committee

    (v) Both parties agreed that they will be responsible for providing adequate security measures for preventing any theft/shortfall and pilferage of coal during the transportation from pickup-point to delivery point and, in any case, the transporter inform the applicant immediately in writing when any such incident occurs and the applicant may insist to file an FIR with the concerned Police station on such incidents in case of recurrence of such events and if the same is attributable to the transporter the applicant shall terminate the agreement without any notice and the retention money along with any accumulated dues would be forfeited by the applicant. The transporter shall not have any claim absolutely on the amounts forfeited.

    (vi) The applicant shall decide the loss of time and expenditure involved impacting the smooth functioning of the project. Loss incurred due to such incidents will be recovered in running bills by the applicant proportionately from all the transporters. The basis and the recovery amounts decided by the applicant is final and binding. The recoveries so deducted may vary month on month depending upon the level of non-compliance.

8.3 The applicant also submitted sample loading slip & gate pass both dated 11.10.2020 which contain the details including Serial Number, Work Order Number, Vehicle Number, Transporter Name, Owner Name, License Number, Mobile Number of the Driver, Tare Weight, Gross Weight, Net Weight, Coal Stock Yard In Time & Out Time, Date and E Challan Number. Further, the applicant submitted sample Transport Challan under Form - D required to be issued under Mines & Minerals (Development & Regulation) Act 1957 which contain the details including Name and address of the lessee, Details of the lessee permit, Name of mineral/grade, Name and address of the purchase to whom mineral has been sold and to be supplied, Quantity, Vehicle Number, Sale price, Name and address of the transporter, Name and address of the driver, Place of delivery of mineral, Distance, Date & time of dispatch of material. The applicant also submitted Delivery Challan under Rule 55 of CGST Act which contain details including Transport mode, Transporter name, Vehicle Name, LR No. /Challan no., Delivery Challan No. & Date, Date of supply, Place of dispatch, Place of delivery, Description of goods transported, etc.

8.4 We find in this regard that as per Notification No. 11 /2017-Central Tax (Rate), dated 28-6-2017, "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. We find that 'consignment note' has not been defined in the Act or in the Notification either. In this context we take the help of Explanation to Rule 4B of Service Tax Rules, 1994 wherein the 'consignment note' has been defined as a document provided by a goods transport agency against the receipt of goods for the transport of goods by roadways in a goods carriage. The document contains the details like serial number, name of the consigner and consignee, registration number of the goods carriage in which the goods are transported, details of goods being transported, details of the place of origin and destination, and the person who will be liable for the service tax payable from the consignor, consignee or the goods transport agency.

8.5 In the instant issue we find that the applicant maintains all the details, except taxation, of goods from one place to another in the documents/forms mentioned supra. The forms so maintained/filled carry details of material, vehicle no., name of driver & signature & other details. Thereafter the goods are handed over to transporter. The transporter has liability to transport goods safely to the desired destination. As a token of safe delivery of goods weighment challans at the railway siding have been issued. Moreover, by signing the Work Order, detailed supra, the transporter essentially undertakes the responsibility cast upon a goods transport agency and the consignee or consignor of the goods, whom the services are provided, gets certain rights which can be exercised against the transporter in respect of transportation of the goods including recovery of monetary value of loss of time & expenses.

8.6 We find that in this case it can be treated that the applicant has made an arrangement in place of consignment note by issuing different forms in their own style which they handover to the transporters and after delivery of the goods, weighment challans have been issued at railway siding which proves that goods have been delivered safely. After verification of the quantity, the payment is released to the transporters in due course as per the clauses of agreement mentioned supra.

8.7 We also find that these forms maintained by the applicant contain the name of the consignor and consignee, registration number of the goods carriage in which the goods are transported, details of the goods transported, etc. Thus, we observe that the said Forms are consignment note in terms of Explanation to the Rule 4B of the erstwhile Service Tax Rules 1994. Further the transporter is liable for safe delivery of goods to the destination as widely enumerated and agreed in the Work Order discussed supra.

8.8 We further observe that the purpose of issuing consignment note 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. In the present case also collective reading of Work Order awarded to the transporter with the requisite forms required to be filled/signed, makes it amply clear that the transporter becomes responsible for the goods till its safe delivery to the destination. For the sake of argument that for being treated as goods transport agency issuance of consignment note is must. If such argument is accepted than there will be no need to pay GST by a person providing service of goods transport merely on a ground that he is not issuing consignment note. And this will open an avenue for tax leakage and legal complications. This must not have been the intention of the legislature to not tax the service providers purely on the ground that they were not issuing consignment notes especially in the applicant's instant arrangement involving such huge, continuous and organized supply of transportation service.

8.9 In view of the above discussion & findings, we hold that the condition of GTA is fulfilled and thus the services procured from persons who have not taken registration for transportation of goods fall under the definition of GTA.

8.10 As per the provisions of Section 9(3) of the Act, the Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. We find that a list of goods on which GST is payable under Section 9(3) of the Act is given in the Notification No. 4/2017-Central Tax (Rate), dated 28-6-2017 and the category of services on which tax is payable is enumerated in the Notification No. 13/2017-Central Tax (Rate), dated 28-6-2017. On perusal of Notification No. 13/2017-Central Tax (Rate), dated 28-6-2017, we find that the services rendered by the 'Goods Transport Agency' in short GTA falls under 'Reverse Charge Mechanism' (in short RCM) and the applicant is liable to pay GST on the same under RCM after appropriate valuation of the service

8.11 Further, GST applicable in this case has been covered under Entry 9(iii) of the Notification No. 11/2017-C.T. (Rate) dated 28.06.2017 (Heading 9965), as amended, subject to conditions mentioned therein, i.e., a GST Rate of 5% (CGST 2.5% + SGST 2.5%) will be applicable provided that credit of input tax credit charged on goods and services used in supplying the services has not been taken. However, Entry No. 9(iii) of the said Notification has been substituted vide Notification No. 20/2017-CT (Rate) dated 22.08.2017 for including an alternative GST Rate of 12% (CGST 6% + SGST 6%), provided that the transporters opted to pay so. The relevant entry has been reproduced below for ready reference.

Sr. No. Chapter, section or heading Description of service Rate (per cent) Condition
9

Heading 9965

(Goods Transport Services)

(iii) Services of Goods Transport Agency ('GTA') in relation to transportation of goods (including used household goods for personal use).

Expin. : goods transport agency means any person who provides services in relation to transportation of goods by road and issues consignment note, by whatever name called.

2.5 Provided that credit of input tax credit charged on goods and services used in supplying the services has not been taken [Please refer explanation no. (iv)]
Or
6 Provided that the goods transport agency opting to pay Central Tax @ 6% under this entry shall thenceforth, be liable to pay Central Tax @ 6% on all the services of GTA supplied by it

ORDER

9. For reasons as discussed in the body of the order, the questions are answered thus, -

Question (a) - Whether the activity of transportation of coal from the mine to the railway siding at Pakur, till the time the railway siding is made operational at the mine, is an independent activity or part of supply of mining service?

Answer (a) - Activity of transportation of coal from the mine pit-head to the railway siding is an independent activity.

Question (b) - If the provision of transportation of coal is an independent activity, whether exemption is available to the applicant as 'transportation of goods by a person other than GTA'?

Answer (b) -The transportation work supplied by the applicant to PCMPL is a other supporting transport services (Heading 996793) and covered under Entry ll(ii) of the Notification No. 11/2017-C.T. (Rate), dated 28.06.2017 & would be chargeable to GST at 18% (CGST 9% + SGST 9%) as provided under the Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 (as amended).

Question (c) - Whether the applicant is liable to pay GST under RCM on the transportation services received from the transporters, as they are not issuing consignment note?

Answer (c) - Services received from the unregistered transporters by the applicant falls under the definition of "GTA" services (Heading 9965) in terms of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 as substituted vide Notification No. 20/2017-Central Tax (Rate), dated 22.08.2017 and the same are covered under 'RCM' in terms of Notification No. 13/2017-Central Tax (Rate), dated 28-6-2017.

This ruling is valid subject to the provisions under Section 103(2) until and unless declared void under Section 104(1) of the GST Act.

Pradhuman Badri Prasad Meena Ram Chandra Prasad Barnwal

Member Member
(Central Tax) (State Tax)