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Government of India
Ministry of Finance
Department of Revenue
Tax
Research Unit
Circular No. 1/1/2017-IGST
North Block, New Delhi
Dated the 7th of July, 2017
To,
The Principal Chief Commissioner/Chief Commissioners/ Principal
Commissioner/
Commissioner of Central Tax (All) / Director General of Systems
Subject: Clarification on Inter-state movement of various modes of
conveyance, carrying goods or passengers or for repairs and maintenance-
regarding
The issue relating to levy of IGST exemption on inter-state movement of
various modes of conveyance, carrying goods or passengers or for repairs and
maintenance, between distinct persons as specified in section 25(4) of the
Central Goods and Services Tax Act, 2017, carrying goods or passengers or both;
or for repairs and maintenance, [except in cases where such movement is for
further supply of the same conveyance] has been examined.
2. In the above context, the legal provisions in GST laws are as under:
a) As per section 24 (1) (i) of the Central Goods and Services Tax Act, 2017,
persons making any inter-State taxable supply shall be required to be registered
under this Act.
b) As per section 25(4) of the said Act a person who has obtained or is
required to obtain more than one registration, whether in one State or Union
territory or more than one State or Union territory shall, in respect of each
such registration, be treated as distinct persons for the purposes of this Act
c) Schedule I to the said Act specifies situations where activities are to be
treated as supply even if made without consideration which also includes supply
of goods or services or both between related persons or between distinct persons
as specified in section 25, when made in the course or furtherance of business
d) Section 7 (2) envisages that activities or transactions undertaken by the
Central Government, a State Government or any local authority in which they are
engaged as public authorities, as may be notified by the Government on the
recommendations of the Council, shall be treated neither as a supply of goods
nor a supply of services.
3. Against the above background, the issue of inter-state movement of goods
like movement of various modes of conveyance, between distinct persons as
specified in section 25(4) of the said Act, not involving further supply of such
conveyance, including
i. Trains,
ii. Buses,
iii. Trucks,
iv. Tankers,
v. Trailers,
vi. Vessels,
vii. Containers,
viii. Aircrafts,
(a) carrying goods or passengers or both; or (b) for repairs and maintenance,
[except in cases where such movement is for further supply of the same
conveyance] was discussed in GST Council’s meeting held on 11th June, 2017 and
the Council recommended that such inter-state movement shall be treated ‘neither
as a supply of goods or supply of service’ and therefore not be leviable to
IGST.
4. In view of above, it is hereby clarified that “the inter-state movement of
goods like movement of various modes of conveyance, between distinct persons as
specified in section 25(4) of the Central Goods and Services Tax Act, 2017,
including the ones specified at (i) to (viii) of para 3, may not be treated as
supply and consequently IGST will not be payable on such supply.
5. However, applicable CGST/SGST/IGST, as the case may be, shall be leviable
on repairs and maintenance done for such conveyance.
(Ruch Bisht.)
Under Secretary (TRU)
[F. No. 354/119/2017 –TRU (Pt) ]
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