The applicant being a Goods Transport Agency (GTA) wants to be registered under GST. It has sought an advance ruling to determine whether it can provide vehicles used for transportation of goods on hire basis to another GTA?
The Authority for Advance Rulings observed that the applicant is desirous of providing goods transportation services as GTA and giving vehicles on hire to another GTA. Services provided as GTA are different and independent from the services of giving vehicles on hire basis. There is no provision in law barring GTA from renting vehicle to another GTA. As far as treatment under GST is concerned, services of GTA in relation to transportation of goods are liable to 5% GST provided that ITC cannot be taken or 12% GST with ITC. Services of GTA when provided to specified category of persons are covered under reverse charge. However, the services of providing vehicles on hire basis to another GTA is exempt from GST.
The Authority for Advance Rulings held that registered person can be GTA and can also give vehicles to another GTA on hire basis at the same time. Services of GTA are taxable at the rate of 5% or 12% and services of hire provided by GTA to another GTA are exempt from GST.
Saravana Perumal, In re - [2020] 113 taxmann.com 288 (AAR - KARNATAKA)
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