The Gujarat Authority for Advance Ruling ( AAR ) has held that Gujarat State Road Transport Corporation (GSRTC) for enabling it GTA for door to door delivery of parcels falls under the category of Business Support Services and attracts 18% GST.
The applicant, M/s. Gujarat State Road Transport Corporation (GSRTC) mainly engaged in the passenger transportation services and it operates more than 8700 buses daily basis and is engaged in intra state as well as interstate passenger transportation.
GSRTC entered agreement with M/s Ashapura Trade and Transport Private Limited, a courier agency or GTA, to provided space in its buses, on top of the bus as well as in bus cabin, for transporting parcels of Ashapura. The parcels booked by Ashapura and transported by the buses run by GSRTC from one station to another station which comes in its scheduled route. GSRTC submits that it is not issuing any consignment note, nor is engaged in door to door delivery of the parcels booked by Ashapura. For the transportation of said parcels, GSRTC receives consideration as per the agreement.
GSRTC submits that the said activity is exempt in terms of Sr No 18 of Notification No 12/2017-Central Tax (Rate) which reads as follows:
Services by way of transportation of goods-
(a) by road except the services of-
(i) a goods transportation agency;
(ii) a courier agency;
(b) by inland waterway
GSRTC submits that the activity will be taxable when it is of a courier agency or a goods transportation agency. Except that, all other activity of road transportation is exempt.
GSRTC submits that in transportation of goods through rail, the customer goes to the booking office and delivers the goods. When the goods are given, the railway authorities give the railway receipt. The railway authorities then transport the goods from origin to the destination. At the destination, the recipient collects the goods from the office of railway by showing the railway receipt. In this case, the activity is not taxed under the category of ‘courier’. GSRTC further submits that it is merely transporting goods given by Ashapura by providing space in its bus from one location to another location. It is not doing any treatment or process on the goods. The goods are merely transported from one location to another location in the same condition. Not a single process on the goods is being done by GSRTC.
The Coram of Sri Atul Mehta, Member (State) and Sri Arun Richard, Member (Center) has held that “that GSRTC provides services to such firms/ agencies (its service recipients) carrying on the business of transportation of parcels, specific allied services. We agree with GSRTC that it itself is not a courier agency as it is not engaged in door to door transportation of goods/articles/documents. It is a fact on record that Ashapura is engaged in door to door transportation of its parcel goods but not GSRTC. What we find from the agreement is that GSRTC’s service to Ashapura is supporting the business of Ashapura, by transporting the parcels of Ashapura from one destination to other, wherein Ashapura is both the consignor and consignee at the respective bus stations. Ashapura utilises the services of GSRTC for enabling it ( Ashapura) for door to door delivery of parcels. Further, the specific activity of GSRTC supplying parcel office space/cabin/shed to Ashapura falls under the category of infrastructural support services which is a subset of Business Support Services. We hold GSRTC supplies Business Support Services to its service recipient. The standard agreement submitted before us asserts our findings. Hence, in this specific scenario presented before us, GSRTC supplies Business Support Service to its recipient. SAC is 998599, covering Other Support Services and liable to GST at the rate of 18%”.
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