1. A Scrutiny Notice in Form GST ASMT-10 dated XX June 20XX has been issued upon the Noticee under Section 61 of CGST Act 2017 read with Rule 99(1) of CGST Rules 2017 vide which Ld. Proper officer, State Tax, Sector-X, State of Jurisdiction (“Ld. Proper Officer”) has intimated certain discrepancies, noticed while scrutinizing the return(s) filed by the Noticee for the period April 20XX to March 20XY. Detailed description of the discrepancies raised by the Ld. Proper Office has been provided hereunder:
2. It has been alleged by the Ld. Proper Officer that the Noticee had made purchase of Rs………. However, GSTR 2A and RCM do not reflect the payment of goods transport services. Thus, alleged that account books have not been properly maintained by the Noticee.
3. It has been alleged by the Ld. Proper Officer that the Noticee had made outward supplies of Rs………. However, GSTR 2A and RCM do not reflect the payment of goods transport services. Thus, alleged that account books have not been properly maintained by the Noticee.
4. On the verification of the discrepancy, it was found these discrepancies relate to the payment of goods Transport Services.
NOTICEE’S SUBMISSIONS
The Noticee, in respect of impugned notice dated XX June 20XX, makes the following detailed submissions for the allegation/observation without any prejudice:
A. PAYMENT OF GOODS TRANSPORT SERVICES ON PURCHASES MADE: GSTR-2A AND RCM DO NOT REFLECT THE PAYMENT OF GOODS TRANSPORT SERVICES DUE TO THE FOLLOWING REASONS:
1. The department vide Notice under Section 61 dated XX June 20XX has alleged that Noticee had made huge purchases of Rs. .……/- through number of transactions as per GSTR 2A. But Noticee’s GSTR 2A and RCM do not reflect the payment of goods transport services (GTA). Thereby, it is alleged that Noticee has evaded the turnover of Rs. ……. and has not maintained accounts books properly.
2. In this respect, It is hereby submitted that the tax leviable in respect of goods transportation services shall be paid on reverse charge basis by recipient of such services as provided in Notification No. 13/2017- Central Tax (Rate) dated 28.06.2017 & is re-produced verbatim as under:
| Sl. No | Category of Supply of Services | Supplier of service | Recipient of Service |
| (1) | (2) | (3) | (4) |
| 1 | Supply of Services by a goods transport agency (GTA) in respect of transportation of goods by road to-(a) any factory registered under or governed by the Factories Act, 1948(63 of 1948);or(b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India; or(c) any co-operative society established by or under any law; or (d) any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services Tax Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act; or(e) any body corporate established, by or under any law; or (f) any partnership firm whether registered or not under any law including association of persons; or (g) any casual taxable person. | Goods Transport Agency (GTA) |
(a) Any factory registered under or governed by the Factories Act, 1948(63 of 1948); or(b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India; or(c) any co-operative society established by or under any law; or (d) any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services Tax Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act; or (e) any body corporate established, by or under any law; or (f) any partnership firm whether registered or not under any law including association of persons; or (g) any casual taxable person; located in the taxable territory. |
3. It is further submitted that Out of the total purchases of Rs. ……., an amount of Rs. ……. relates to the purchases made from various vendors. Further, transportation charges on such purchases are being borne by such supplying dealer and being the recipient of such services the liability of tax under reverse charge is imposed on such vendor. Thus, GSTR2A & RCM (as of Noticee here) do not reflect any payment towards goods transportation services.
Sample invoice raised by transporter to such location of the Noticee along with transportation bilty is enclosed as Annexure-B.
4. Further, remaining purchases as appearing in GSTR-2A Of the Noticee majorly relates to services procured by the Noticee in respect of services …….. .Thus, in respect of these services, there doesn’t arise any liability/ arise liability of Rs. ……. on the part of Noticee.
B. PAYMENT OF GOODS TRANSPORT SERVICES ON OUTWARD SUPPLIES MADE: GSTR-2A AND RCM DO NOT REFLECT THE PAYMENT OF GOODS TRANSPORT SERVICES DUE TO FOLLOWING REASONS:
5. As cited in the notice, it is alleged that Noticee had made outward supplies of Rs. …………. But Noticee’s GSTR 2A and RCM in GSTR-3B do not reflect the payment of goods transport services. Thereby, it is alleged that Noticee has evaded the turnover in respect of transport services and has not maintained accounts books properly.
6. In response, the Noticee submits that it had entered into a Carrying & Forwarding Agreement with M/s XYZ Pvt. Ltd. (hereinafter referred to as “xyz” or “C&F A”) for effecting its outward supplies, wherein xyz issues tax invoices to the stockiest on behalf of the Noticee using the GSTIN & Name of the Noticee. Further, administrative expenses for maintaining stock & transportation charges for effecting such sale is borne by C&F A itself. The C&F A receives commission from the Noticee in consideration of various duties & obligations discharged by it pertaining to agreement entered into by it with the Noticee.
Conclusion
7. It can hereby be concluded that Goods Transportation Services are directly rendered to M/S XYZ PVT. LTD. rather than to the Noticee, therefore, liability to pay tax on GTA Services devolves on the former.
Copy of sample invoices and Agreement is attached as Annexure-C.
