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12% GST on Agreement of Supply of Services on Transportation of Goods by Road: Maharashtra AAR [Read Order]

By Taxscan Team -

The Maharashtra Authority of Advance Ruling (AAR) ruled that 12% of GST is applicable to the agreement of supply of services in relation to transportation of goods by road.

The applicant, POSCO India Steel Distribution Centre Pvt Ltd. is engaged in providing logistic consultancy services and logistics management services have entered into a rate contract agreement with POSCO MAH Pvt. Ltd., Mangaon MIDC, Dist. Raigad and its entity group companies, to provide a supply of services in relation to transportation of goods by road i.e. steel coils in bulk by road.

The applicant sought advance ruling on the issue that What will be the classification of the services (whether under service codes 996511 or 996791or 996799 or any other) of the Applicant in case the Applicant issues the consignment note, however, the actual transportation is done through the third-party transporter (who also issues the consignment note).

The Authority consists of members A.A. Chahure and P. Vinitha Sekhar ruled that the service supplied by them would be covered under Heading 9965 which covers ‘Goods Transport vice’, Sub Heading 99651 which covers ‘Land Transport services of Goods’ and further under SAC 996511.

“GST applicable in this case will be covered under Entry of the Notification 11/2017 (CT) Rate dated 28 June 2017 subject to conditions mentioned therein i.e. a GST Rate of 5% will be applicable provided that credit of input tax credit charged on goods and services used in spring the services had not been taken and in the alternative GST Rate of 12% will be applicable, provided that the applicant, goods transport agency, opting to pay central tax 6% under this entry on all the services GTA supplied by it,” the AAR ruled while addressing the issue pertaining to GST rate on the services.

“The third-party transportation is not charging any GST Services supplied by the to the applicant and hence, the applicant cannot avail ITC in this respect,” the AAR said.

To Read the full text of the Order CLICK HERE