The Gujarat Authority for Advance Rulings (AAR) has ruled that a GST of 18% applies to the transportation of parcels in any buses of the Gujarat State Road Transport Corporation (GSRTC). The ruling Advance Ruling No. GUJ/GAAR/R/2022/15 was passed on 22nd March 2022 and was recently available to the public.
GSRTC got into a contract for transporting parcels on consideration with M/s Ashapura Trade and Transport Private Limited, a courier agency or Goods Transport Agency (GTA). The authority provided dedicated spaces inside or on top or in the cabins of its buses. GSRTC primarily engages in passenger transport services daily, operating more than 8,700 buses within and across the state.
The GSRTC picks up the parcels from the Ashapura and sends them to their respective destinations en route the journey. However, the GSRTC was not raising any consignment notes or engaged in door-to-door delivery service for Ashapura.
A courier agency can be distinguished from a transport agency due to the door-to-door delivery service of the courier agency. A representative from a courier agency usually picks up the parcels or documents from the sender’s premises, transports them and hand-delivers them to the recipient within a limited period.
However, the authority pointed out that GSRTC is not engaged in the door-to-door delivery activity. The Ashapura team handed over the parcel to the bus conductor at the source for transportation in the bus to the destination. Again, the Ashapura team collected them. After that, their team representative delivers it to the recipient’s address. Moreover, GSRTC does not know the recipient to whom the parcel is delivered.
Accordingly, the advance ruling applicant, GSRTC, reached out to the AAR. The authority wanted to know if GST must be levied on the Ashapura parcels transporting their buses. Further, they wanted AAR to clarify if GSRTC is eligible to claim an exemption under the GST Notification No 12/2017-Central Tax (Rate) at serial number 18. It pertains to the exempted goods transportation, not being a GTA or courier agency.
The AAR bench comprised Arun Richard and Atul Mehta. They noticed that parcel transportation on behalf of the courier agency by the GSRTC could be classified as infrastructural support services. It is a subset of business support services and cannot be goods transport agency. Further, GSRTC mentioned in the contract that it would not compensate or be responsible for the loss of parcels in transit due to accidents or damage or theft. The recipient is responsible for the same. The consideration comprises transportation charges for booking a space on the bus. Accordingly, 18% GST is payable by Ashapura to GSRTC for the transportation services of courier parcels.
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Annapoorna, popularly known as Anna, is an aspiring Chartered Accountant with a flair for GST. She spends most of her day Singing hymns to the tune of jee-es-tee! Well, not most of her day, just now and then.