Rajasthan AAR Rejects GTA Exemption Application as Issue Already Pending and Decided

In re Mahesh Transport Company (GST AAR Rajasthan)

Summary: Mahesh Transport Company sought an advance ruling on whether its proposed transportation services to M/s Mahesh Transport Gujarat, another goods transport agency (GTA), were exempt under Notification No. 12/2017-Central Tax (Rate) or taxable under Notification No. 11/2017-Central Tax (Rate). The applicant described a coal transport arrangement between Gujarat and Rajasthan and said it issued consignment notes. In its submissions, it relied on the definition of a GTA and on Gunesh Logistics regarding the significance of a consignment note. Its stated alternative was that the transportation service attracted the rate notification. The material before the Authority also included comments from the jurisdictional officer addressing the actual character of the arrangement, the responsibility for carriage and the distinction between GTA service and the hiring of vehicles. Those comments and legal submissions included a view that merely making vehicles available to another GTA would fall within the exemption for hiring a means of transport under Entry 22(b); they were submissions on the merits, not the Authority’s ruling.

The Enforcement Wing reported a pending investigation following a search at the applicant’s premises on 07.01.2026 under Section 67(2). According to the report, the applicant had taken input tax credit on invoices for vehicles hired from others and was itself hiring out vehicles to other GTAs. The investigating authority treated those outward hiring supplies as exempt and said that reversal of common credit under Rules 42 and 43 arose on that basis. At a second hearing on 30.07.2026, the applicant argued that the investigation concerned a different issue. It also produced an order dated 10.12.2025 for April 2021 to March 2022, concerning credit of Rs. 14,72,392 on invoices of M/s Deepak Motors, together with interest and penalty. The order recorded that Deepak Motors merely supplied vehicles without issuing consignment notes and treated that supply as exempt.