The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed the demand of service tax for the commission availed by the assessee on the goods transport agency service on the ground of the limitation.
J.B Exports, the appellant assessee is engaged in the export of goods to foreign buyers and while raising the invoices in the sale invoice the assessee had deducted 10%/12.5% as commission, and after deduction of the said commission the amount was realized against the export proceeds.
The original authority confirmed the demand for service tax for commission paid to the foreign buyer by the assessee and also demanded the service tax on the Goods Transport Agency(GTA) services provided by the assessee.
H.D Dave, the counsel for the assessee contended that since the GTA service was used for the export of goods, the said service even though provided by the assessee was taxable at the initial stage of availing the service but used for the export of goods and eligible for exemption under Notifications 18/2009-service tax and 31/2012-Service Tax.
Tara Prakash, the counsel for the department relied on the decision made by the lower authorities and contended that the assessee was liable to pay the service tax on the commission paid by the foreign buyer on the goods transport agency service.
The Bench observed that the demand for service tax on the commission as well as on GTA service was not sustainable on the grounds of limitation.
Also observed that the revenue was raised the demand by invoking the extended period.
The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) quashed the demand for service tax on the goods transport agency service while allowing the appeal filed by the assessee.
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