5% GST Applies on Rail Transport of Empty Containers: Rules AAR

The present application, dated October 16, 2025, has been filed by a company named M/s. Hasti Petro Chemical and Shipping Limited before the Gujarat Authority for Advance Ruling, Goods and Services Tax (GST) D/5, Rajya Kar Bhavan, Ashram Road, Ahmedabad 380 009.

The applicant is a registered company under the act of GST Act, having GSTIN 24AAACH7828N1Z8, and is located near Railway CRO, at Nidhrad, Sanand-Kadi Road, Sanand, Gujarat.

The applicant holds a Container Train Operator (CTO) License. This license allows them to run rakes on the Indian Railways to transport goods in containers by rail. The applicant not only transports loaded containers but also transports empty containers by rail to ease logistics operations. Relying on Entry No. 9(iv) of Notification No. 11/2017-Central Tax (Rate) dated June 26, 2017, the applicant presently charges 12% GST for the transportation of both loaded and empty containers. The service description prescribed by the said notification is “Transport of goods in containers by rail by any person other than Indian Railways.”

However, some customers argue that the transportation of empty containers should fall under Entry No. 9(i) of the said Notification and hence should attract GST at 5% (2.5% CGST + 2.5% SGST) for the description “Transport of goods by rail (other than services specified at item No. (iv)).”

Questions Raised by Applicant:

Seeking the present Gujarat Authority for Advance Ruling (AAR) no. GUJ/GAAR/R/2025/54, the applicant has asked the following questions:

“Question 1: What is the correct GST rate applicable for the transportation of empty containers by rail?

Question 2: What are the legal and tax implications if GST is charged at 5% on the transportation of empty containers instead of 12%?

Question 3: Under what conditions would Entry No. 9(i) (transport of goods by rail, other than services specified at item No. 9(iv)) apply to the transportation of empty containers?”

Answers Given by AAR Gujarat:

The Gujarat Authority for Advance Ruling (AAR) has given the following answers to the questions asked by the applicant:

Answer 1: The applicant should charge GST at 5% as per Clause (i) of Sr. No. 9 of Notification No. 11/2017-CT(R) dated June 28, 2017, for the transportation of empty containers by rail.

Answer 2: In answer to the second question, the authority for advance ruling rules that since they have already held that GST will apply at 5%, there is no need to answer this question.

Answer 3: The applicant must pay 5% GST. But they cannot claim any input tax credit (ITC) on the goods or services they use to provide this service.