The Customs Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata East Zonal Bench held that the payment for services paid by M/s. Singhania & Sons Private Limited from A B Commercial is taxable as Goods Transport Agency (GTA) and not Cargo Handling Service and allowed the refund under rule 4(2) of the Cenvat Credit Rules, 2014.
The appellant, engaged in the business of export of iron ore fines and import of industrial chemicals and distribution of the same, availed the services of A B Commercial for the transportation of goods and to accomplish such service, the loading charges were also recovered from the appellant. A refund of Rs. 2,22,119/- was claimed by the appellant.
Representing the assessee-appellant, Advocate Rahul Dhanuka, contended that the services received by the Appellant from A B Commercial were for ‘GTA’ and not ‘Cargo Handling Service’ as alleged in the instant proceedings by the revenue, enabling the assessee to claim a refund in respect of the transportation bills issued to them as already remitted under Reverse Charge Mechanism (RCM).
On behalf of the revenue respondent, the authorised representative S. C argued that the services received by Singhania & Sons were in the nature of Cargo Handling Services as the bills included charges for loading and unloading, relying on the decision of the adjudicating authority.
The definition of Goods Transport Agency (GTA) was examined in depth by the Judicial Member P K Choudhary by the perusal of the principle of classification given by Section 65A as if any ancillary/ intermediate service is provided in relation to transportation of goods, and the charges, if any, for such services are included in the invoice issued by the GTA, and not by any other person, such service would form part of GTA service.
In the light of the ruling in Rungta Projects Ltd. Vs. CCE & ST, the loading and unloading was analysed as to whether it forms a part of the service provided by the assessee. It was held to be an essential part in the services of the GTA and thus held liable to be taxed as GTA and not Cargo Handling Service, as the activity of loading and unloading of goods was instantly for transportation and not movement of goods otherwise.
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