Advance Ruling shall be binding only on the service provider and the service recipient

M/s. Vadilal Enterprises Ltd. supplies ice cream in various States in addition to Gujarat State. For transporting the goods to places located in different States, Vadilal has been availing the facility of refrigerated vehicles because the goods have to be stored and preserved at a particular temperature for avoiding deterioration in quality. Various independent agencies have been providing refrigerated vehicles to Vadilal for transportation of its goods. Vadilal appointed M/s. Celsius Logistic Solution Pvt. Ltd. is a middle agency/agent for locating customers whose goods could be transported in empty vehicles.

The authority was approached to decide upon the liability to pay GST for transportation of goods of the customers located by an independent agency when the vehicles are used for further transportation, after unloading the applicant’s goods at the destination of the applicant’s branches or depots.

GAAR while deciding who is liable to pay GST for transportation of goods of the customer of Celcius, held that Vadilal has no locus standi, vide Section 95 CGST Act, to seek a Ruling on the tax liability for a transaction entered between M/s Celcius and its (Celcius’s) customers, wherein Celcius 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, the Ruling was binding on the Vadilal. This subject Ruling, vide Section 103(1) CGST Act is not binding on Celcius and its service recipients.

Also, Section 95(a) CGST Act defines an advance ruling as a decision provided in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. We find that subject Ruling is sought by M/s Vadilal and not M/s Celcius/Celcius’s customers. M/s Vadilal is not a Goods Transport Agency. In the instant case, Vadilal supplies Business Support Service to Celcius (an independent agency) and the tax liability is on forwarding charge. 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.

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