No prohibition for the freight transport agency to rent vehicles to another RGT: AAR [Read Order]



Freight transport agency - GTA - No bar - taxscan

The Karnataka Advance Ruling Authority (AAR) has ruled that there is no restriction for the freight forwarding agency to hire a vehicle from another TMN to provide transportation services.

The applicant Sri Saravana who wished to register his RGT. In addition to providing the transport services, the applicant also wanted to donate the vehicles on a rental basis to another freight transport agency. Now the question raised in the application was whether the applicant can give the transport vehicle to the other RGT was justified?

In addition, the applicant argued that the freight transport agency designates any agency that facilitates the transport service and that the consignment note was the prerequisite for the service provider.

After duly observing and hearing the claimant’s assertion, the Karnataka AAR, composed of two members, Harish Dharnia and Dr Ravi Prasad, observed that the Central Goods and Service Tax Act (CGST) and the Karnataka Goods and service Tax Act (KGST) consists of the same provisions and in case the provisions differ from these, the provisions are specifically mentioned. The AAR felt that the person may be the GTA to provide transportation services and at the same time donate the rental vehicle to another RGT.

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