Question

Can Exemption prescribe under Sr. No. 22 of GST rate Notification No. 12/2017-Central tax (rate) dated. 28.06.2017. applicable for transaction between related persons.

i.e. Hire of motor vehicles for providing GTA service form one GST registered firm to another GTA register firm. of the same family and person is director on both firms.
 

Answer

The exemption is available to the supplier. Please note that for the different registration owned by a person having same PAN number, the registered persons are considered as distinct entity. The same is defined under Section 25(5) of CGST Act, 2017 reproduced below.

Where a person who has obtained or is required to obtain registration in a State or Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons for the purposes of this Act.

Since the supplier and receiver of services are distinct person therefore the exemption which are available to supplier in normal course will apply in this case also.

Notification No 12/2017 Central tax (rate) exempts the intra-State supply of Services by way of giving on hire '
(a) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or

(b) to a goods transport agency, a means of transportation of goods.

(c) motor vehicle for transport of students, faculty and staff, to a person providing services of transportation of students, faculty and staff to an educational institution providing services by way of pre-school education and education upto higher secondary school or equivalent.

Thus from above it is concluded that exemption shall be available to supplier irrespective of the fact that the persons are related or distinct. (Reply dt.10/01/2019)