Classification of service— In the instant case, the applicant (M/s. Vadilal enterprises ltd.) submitted that it supplies ice-cream in various States in addition to the supplies in Gujarat State. 

For transporting the goods to places located in different States, Vadilal has been availing facility of refrigerated vehicles because the goods have to be stored and preserved at a particular temperature for avoiding deterioration in quality, for which such refrigerated vehicles are an essentiality. Various independent agencies, who are owners of refrigerated vehicles or are arranging for such vehicles, have been providing refrigerated vehicles to Vadilal for transportation of its goods in question.

Question on which Advance Ruling sought:

1. Who is the person liable to pay GST for transportation of goods of customers located by an independent agency engaged by the applicant, while refrigerated vehicles used for transportation of the applicant’s goods travelled back on return journey, after unloading and delivering the applicant’s goods at the destination?

2. Who is the person liable to GST for transportation of goods of the customers located by an independent agency when the vehicles used for transportation of the applicant’s goods are used for further transportation, after unloading the applicant’s goods at the destination of the applicant’s branches or depots?

3. Who is the person liable to pay GST in respect of goods transport agency service used for bringing back empty plastic trays belonging to the applicant from various places (like branches or depots) to the applicant’s premises?

4. Whether the applicant can avail Input Tax Credit of the entire amount of GST paid on the transaction of the applicant’s goods in refrigerated vehicles although such vehicles travel empty (i.e. without the applicant’s goods being loaded therein) during the return journey?

As per GST scheme of law, consignment note issuance, by whatever name called, is mandatory for a GTA. The issuance of consignment note indicates that the lien on goods has been transferred to the transporter and the transporter becomes responsible for the goods till its safe delivery to the consignee. This aspect is evident in the relationship between Vadilal and its GTA but is absent in the relationship between Vadilal and Celcius.

Vadilal has no locus standi, vide Section 95 CGST Act, to seek Ruling on the tax liability for a transaction entered between M/s Celcius and its (Celcius’s) customers, wherein Celicus is the service provider and its customers are the service recipient. We refer to Section 103(1) CGST Act, which reads that Advance Ruling shall be binding only on the applicant who had sought it and on the concerned officer/ jurisdictional officer in respect of the applicant. In this case, our Ruling is binding on the Vadilal. This subject Ruling, vide Section 103(1) CGST Act is not binding on Celcius and its service recipients.

Held that— M/s Vadilal is not a Goods Transport Agency. In this specific scenario presented before us, Vadilal supplies Business Support Service to Celcius (independent agency) and the tax liability is on forward charge. Further, in view of this Ruling, We hold that Vadilal has no locus standi to seek a Ruling on the which person is liable to pay GST on the activity/ service M/s Celcius supplies to its (Celcius) customers.

M/s Vadilal is liable to pay GST under RCM on the freight charges paid to its transporter. ITC on GST paid on the transaction wherein refrigerated vehicles returned empty during return journey is admissible to M/s Vadilal.