No GST exemption on transport of goods from mother to daughter vessel.

May 24, 2020

Facts

  • M/s Shreeji shipping is in the business of providing services in relation to transportation of goods from Magdalla Port to the General Lighterage Area (Anchoring Point of Mother Vessel) or vice versa.
  • Port of Magdalla is a port in Western India, located on the southern bank of the Tapi River. Lighterage Port situated on the western coast of India in Southern Gujarat, on the southern bank of River Tapi about 16 Km upstream the river.
  • The Port of Magdalla is a lighterage port (i.e. goods are carried from a vessel to a quay by a barrage of other smaller vessel).
  • the applicant submitted that the transportation of goods by inland waterways i.e. (i) national waterways or (ii) other waterways on any inland water is exempted from GST.
  • For the purpose of other waterways on any inland water, the term inland water means one category as “any canal, river, lake or other navigable water within a state.
  • As per applicant goods in barrages from mother vessel to daughter vessel from Magdalla Port, Surat to its general lighterage Area of Magdalla Port is covered in the National Waterway
  • Further service of transportation of goods is being provided between Magdalla Port and its General Lighterage Area (Anchoring Point of Mother Vessel) or vice versa, which falls within the state (Gujarat) and, therefore, transportation services provided within the aforesaid meaning of inland waterway.

Issue before the AAR

  • Whether the service of transportation of goods from Magdalla Port, Surat to its General Lighterage Area of Magdalla Port (From where the Mother Vessel are anchored) or vice versa, is covered under exemption contained at Sr. No. 18 of Noficaon No. 12/2017-Central Tax (Rate)?
  • Whether the service of above transportation falls in the definition of ‘Inland waterways’?

Discussion and Finding of AAR

  • Clause (b) of Entry No.18 of the Noficaon No.12/2017- Central Tax (Rate) dated 28th June 2017 inter alia exempts the Services by way of transportation of goods by inland waterways.
  • inland waterways” comprises of
    • national waterways
    • other waterways on any inland water
  • Inland water means
    • any canal, river, lake or other navigable water within a State
    • any area of any dal water deemed to be the inland water as defined by the Central Government under section 70
    • waters declared by the Central Government
  • The applicant is providing service relating to the transportation of goods in the waterway, i.e. from Magdalla Port to its General Lighterage Area
  • This waterway is a part of the Arabian Sea. Whereas, the term “Other waterway on any inland water” covers any canal, river, lake or other navigable water within a State only.
  • So their contention, that the transportation is being done on the River Tapi, appears to be incorrect
  • Arabian Sea is not a part of the State of Gujarat and, hence, not covered under the term “Other waterway on any inland water” so as to be eligible for exemption of the Services by way of transportation of goods by inland waterways.
  • transportation of goods in barrages from mother vessel to daughter’s vessel from Magdalla Port, Surat to its General Lighterage Area of Magdalla Port is neither covered in the definition of ‘national waterways nor covered in the definition of ‘other waterway on any inland water.
  • So it is not covered under exemption contained at Sr. No. 18 of Noficaon No. 12/2017-Central Tax (Rate).

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