ARRANGING LORRIES AND ISSUING ITS RECEIPT IS A GTA SERVICE

Recently AAR gave an important ruling dated 8th July 2019, regarding hiring of vehicles by GTA in case of Balasubramanyam Saravana perumal. The applicant was engaged in engaging lorries from lorry owners to provide transport facilities to their customers, while acting as an agent between their customers, who require transport charges for his customers, he pays the requisite amount payable to the lorry owners, keeping some commission with him, for having arranged facility to the customers.

The main issue involved in this matter was that what is the rate on which tax is payable?

AAR observed that applicant is issuing lorry receipts (LR) under his own name, containing details of GST registration, truck no., date of issue of LR, consignee name with address, weight, freight charges etc. Therefore, it is clear that the applicant is issuing a consignment note and is providing a transport service. Thereby applicant is a GTA.

Therefore, GST is payable under reverse charge (5%) or payable under the forward charge basics(12%), unless exempted under the Notification No.11/2017 – Central Tax (Rate).