Transporters are only required to carry duplicate copy of tax invoice during the transportation of goods

The Hon'ble Karnataka High Court in the case of Kolvekar Logistics v. Joint Commissioner of Commercial taxes (Appeals), Hubbali [Writ Petition No.100347 of 2022 dated April 22, 2024], quashed the orders and held that in the light of the Rule 138-A of the State Goods and Services Tax Act ("the SGST Act")and Section 68 of the Central Goods and Services Tax Act ("the CGST Act")and Rule 48 of the Central Goods and Services Rules, 2017 ("the CGST Rules") and an opinion was formed that as per Rule 48(1)(b) of the CGST, it is only the duplicate copy which is meant for transporter and the triplicate copy is meant for supplier as per clause (c). Therefore, held that the transporter is not required to carry the original tax invoice, but the law mandates him to carry the duplicate copy.

Facts:

M/s. Kolvekar Logistics ("the Petitioner"), filed the writ petition challenging the orders dated October 1, 2021, and November 30, 2021 ("the Impugned Orders") passed by the Revenue Department ("the Respondent") wherein the Petitioner was penalized, and faced an additional tax demand because the original tax invoice was not carried by the transporter, only a xerox copy was present.

The Petitioner argued that under Rule 48 of the CGST Act and Section 68 of the CGST Act, only the duplicate copy of the tax invoice is required to be carried by the transporter. Despite paying the tax and the penalty, the Petitioner contended that the actions of the tax authorities led to unjust double taxation.

Aggrieved by the Impugned Order the Petitioner filed the writ petition.

Issue:

Whether the transporter required to carry the original tax invoice during transportation of goods, or is a duplicate copy of the invoice sufficient for compliance?

Held:

The Hon'ble Karnataka High Court in Writ Petition No. 100347 of 2022 held as under:

· Relying upon the judgement of Divya Jyothi Petrochemicals Co. v. Joint Commissioner of Commercial Taxes (Appeals) [Writ Petition No. 100378 of 2022 dated February 28, 2024], wherein it was held thatrule 48 of the CGST Rules, deals with the manner of issuing the Invoice. Accordingly, to which the Invoice shall be prepared in triplicate in case of supply of goods. The original copy marked as such is meant for recipient or the purchaser and therefore, same will not be carried by transporter. As per rule 48(1)(b) of the CGST Act, it is only the duplicate copy is meant for transporter and the triplicate copy is for the supplier as per clause (C) of rule 48(1) of the CGST Act. Therefore, it is clear that the transporter is not required to carry Original Tax Invoice but law mandates him to carry the duplicate copy.

· Held that, the transporter is not required to carry the original tax invoice, but as per rule 48(1)(b) of the CGST Act, transporters are mandatorily required to carry the duplicate copy. Thus, this court quashed the Impugned Orders and directed the Respondent to refund the tax, and the penalty amounts paid by the Petitioner within three months.

Our Comment:

Rule 48 of the CGST Rules discusses "Manner of issuing invoice". Rule 48(1) of the CGST Rules states that the invoice shall be prepared in triplicate, in the case of the supply of the goods, in the following manner:

· the original copy being marked as original for recipient.

· the duplicate copy being marked as duplicate for transporter; and

· the triplicate copy being marked as triplicate for supplier.

Further, as per Rule 138(A) of the CGST Rules, documents and devices to be carried by a person-in-charge of a conveyance are as follows;

(1) The person in charge of a conveyance shall carry-

(a) the invoice or bill of supply or delivery challan, as the case may be; and

(b) a copy of the e-way bill in physical form or the e-way bill number in electronic form or mapped to a Radio Frequency Identification Device embedded on to the conveyance in such manner as may be notified by the Commissioner:

Provided that nothing contained in clause (b) of this sub-rule shall apply in case of movement of goods by rail or by air or vessel.

Provided further that in case of imported goods, the person in charge of a conveyance shall also carry a copy of the bill of entry filed by the importer of such goods and shall indicate the number and date of the bill of entry in Part A of FORM GST EWB-01.

(2) In case, invoice is issued in the manner prescribed under sub-rule (4) of rule 48, the Quick Reference (QR) code having an embedded Invoice Reference Number (IRN) in it, may be produced electronically, for verification by the proper officer in lieu of the physical copy of such tax invoice.

(3) Where the registered person uploads the invoice under sub-rule (2), the information in Part A of FORM GST EWB-01 shall be auto-populated by the common portal on the basis of the information furnished in FORM GST INV-1.

(4) The Commissioner may, by notification, require a class of transporters to obtain a unique Radio Frequency Identification Device and get the said device embedded on to the conveyance and map the e-way bill to the Radio Frequency Identification Device prior to the movement of goods.

(5) Notwithstanding anything contained in clause (b) of sub-rule (1), where circumstances so warrant, the Commissioner may, by notification, require the person-in-charge of the conveyance to carry the following documents instead of the e-way bill

(a) tax invoice or bill of supply or bill of entry; or

(b) a delivery challan, where the goods are transported for reasons other than by way of supply.

OFFICIAL JUDGMENT COPY HAS BEEN ATTACHED