In re B2B Trucks Private Limited (GST AAR Tamilnadu)
B2B Trucks Private Limited, a GST-registered entity in Chennai, sought an advance ruling from the Tamil Nadu Authority for Advance Ruling (AAR) regarding the applicability of GST on funds deposited in an account used solely for forwarding freight payments from shippers to carriers. The company operates an online portal connecting shippers and carriers across India, without taking responsibility for the physical movement of goods. Shippers deposit freight amounts into a current account maintained by the company, which are subsequently transferred in full to carriers upon fulfillment of deliveries. The applicant clarified that it acts solely as a facilitator, receiving no deduction, mark-up, or utilization of the funds, and charges GST only on subscription fees received for its services.
During the personal hearing, company representatives confirmed their role as a facilitator and submitted a correction clarifying that the previously mentioned “escrow account” would, in fact, be a “current account,” with the operational conditions unchanged. The main question before the AAR was whether the funds routed through this account could be treated as “consideration” under GST law and whether such transactions constituted a “supply” attracting GST.
The Authority examined the definition of “consideration” under Section 2(31) of the CGST Act, 2017. It concluded that “consideration” refers to any payment made in respect of, in response to, or for the inducement of a supply of goods or services. However, the payments routed by the applicant are made by shippers directly to carriers and are not for any supply provided by the applicant. The only consideration the company receives is its subscription fee from shippers and carriers, on which GST is separately payable. Even if the deposit were treated as consideration, the proviso to Section 2(31) clarifies that a deposit does not qualify as consideration unless applied by the supplier for the supply, which is not the case here.
