Various representations have been received on the matter pertaining to the textile sector and problems being faced by weavers & artisans regardingstorage of their goodsin the warehouse of the transporter. It has been stated that textile traders use transporters’ godown for storage of their goods due to their weak financial conditions.The transporters providing such warehousing facility will have to get themselves registered under GST and maintain detailed recordsin cases where the transporter takes delivery of the goods and temporarily stores them in his warehouse for further transportationof the goods till the consignee/recipient taxpayer’s premises.The transport industry is facing difficulties due to the same and a request has been made to treat these godowns as transitgodowns.

2. In view of the difficulties being faced by the transporters and the consignee/recipient taxpayerand to ensure uniformity in the procedure across the sectors and the country, the Boardin exercise of its power conferred under section 168(1) of the Central Goods and Services Tax Act, 2017(hereafter referred to as the CGST Act) hereby clarifies the issues in the succeeding paragraphs.

3. As per rule 138 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the CGST Rules) e-way bill is a document which is required forthemovement ofgoods from the supplier’s place of business to the recipienttaxpayer’s placeof business. Therefore, thegoods in movement including when they are stored in the transporter's godown (even if the godown is located in the recipienttaxpayer’s city/town)prior to delivery shall always be accompanied by a valid e-way bill.

4. Further, section 2(85) of the CGST Act defines the “place of business” to include “a place from where the business is ordinarily carried out, and includesa warehouse, a godownor any other place where a taxable person stores his goods, supplies or receivesgoods or services or both”. An additional place of business is the place of business from where taxpayer carriesout business related activities within the State, in addition to the principal place of business.

5. Thus, in casethe consignee/recipienttaxpayerstores hisgoods in the godown of the transporter,then the transporter’s godown hasto be declared as an additional place ofbusiness by the recipient taxpayer. In such cases, mere declarationby the recipient taxpayer to this effectwith the concurrence of the transporter in the said declarationwillsuffice. Where the transporter’s godown has been declared as the additional place of businessby the recipient taxpayer, the transportation under the e-way billshall be deemed to be concluded once the goods have reached the transporter’s godown(recipienttaxpayer’ additional place of business). Hence,e-way bill validity in such cases will not be required to be extended.

6. Further,whenever the goods are transported from the transporters’ godown , which has been declared as the additional place of businessof the recipienttaxpayer, to any otherpremises of the recipienttaxpayerthen, the relevant provisions of the e-way bill rules shall apply. Hence,whenever the goods move from the transporter’sgodown (i.e, recipienttaxpayer’s additional place of business) to the recipienttaxpayer’sany other placeof business,a valid e-way bill shallbe required, as per the extant State-specific e-way bill rules.

7. Further,the obligation of the transporter to maintain accounts and records as specified in section 35 of the CGST Actread with rule 58of the CGST Rulesshall continue as a warehouse-keeper.Furthermore, the recipient taxpayer shall also maintain accounts and records as required under rules56 and 57 of the CGST Rules. Furthermore, as per rule 56(7) of the CGST Rules, books of accounts in relation to goods stored at the transporter’s godown (i.e., the recipienttaxpayer’s additional place of business) by the recipient taxpayer may be maintained by him at his principal place of business. It may be noted that the facility of declaring additional place of business by the recipient taxpayer is in no way putting any additional compliance requirement on the transporters.

8. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

9. Difficulty, if any, in implementation of this Circular mayplease be brought to the notice of the Board. Hindi version would follow.
 

(Upender Gupta)
Commissioner (GST)

CBEC-20/13/01/2018-GST