The Tamil Nadu GST AAR has decided that no tax will apply to the leftover freight money that shippers place into an escrow account. This is true as long as the money is later transferred to one of the carriers in full, without any cuts or deductions.
The petitioners, B2B Trucks Private Limited, operate an online portal that streamlines relations between shippers and carriers located across India. The actual movement of goods has not been undertaken by the company, but it acts as a digital facilitator between both parties.
Shippers within its business model pay the major part of the freight to the carrier and deposit the remaining balance into the petitioner’s existing account, which is subsequently transferred in full to the carrier’s account once the delivery is completed.
The applicant does not retain or deduct any part of this balance amount and already pays Goods and Services Tax (GST) on subscription fees collected from shippers and carriers for using the platform.
The applicant approached the authority asking to clarify whether GST is chargeable on the balance freight amount temporarily held before being transferred to the carriers.
A Bench of C. Thiyagarajan (CGST Member) and B. Suseel Kumar (SGST Member) stated that the balance freight amount obtained by the applicant from shippers represents funds that are subject to being paid to the carriers and not consideration for any supply made by the applicant.
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As the applicant only streamlined the funds transfer without rendering a separate taxable service in the process, AAR discovered that GST does not apply to these transactions.
The authority stated that after it is determined that the freight amount deposited with the applicant does not constitute a consideration to the applicant and after it is established that no supply of goods or services or both is there, the applicant could not be obligated to file the taxes under GST on the deposit amount which does not associate to them, and is directed to be forwarded to accounts of carriers without any deduction.
| Case Title | B2B Trucks Private Limited |
| Advance Ruling No. | 49/ARA/2025 |
| GSTIN | 33AALCB2798J129 |
| Tamil Nadu AAR | Read Order |
