Sunday, August 9, 2020
Home Headlines Activity of Transportation of Iron Ore can’t be treated as GTA Services:...

Activity of Transportation of Iron Ore can’t be treated as GTA Services: CESTAT [Read Order]

By Mariya Paliwala -

The Custom, Excise, and Service Tax Appellate Tribunal (CESTAT) has recently held that the activities of transportation of iron ore being one of the conditions in the contract with the raising contractors, who do not issue any document/consignment note, cannot be treated as GTA services, as defined under Sec.65(105)(zzp) read with Sec.65(50b) of the Finance Act,1994.

The appellant, M/s. East India Minerals Limited is engaged in the activities of mining iron ore, in the mines leased by the Government of Odisha. For raising, screening, and transportation of iron ore from the mining area to the appellant’s crusher plant, the appellant engaged raising contractors. The iron ore raised from the mines is weighed at the mining site, by the representatives from the Department of Mines under Government of Odisha. After the weight of the material is accepted, the Government authorities issued documents known as Transit Pass in ‘Form-G’, containing all relevant particulars. The appellants claimed refund of service tax paid on such transportation of iron ore which was rejected by the department.

Relying on the various decisions, the appellant contended that the transportation of goods, without the issue of any consignment note, in terms of Rule 4B of Service Tax Rules,1994, will not come under the definition of GTA services, in terms of Sec.65 (105) read with Sec.65(50b) of the Finance Act, 1994.

The appellate tribunal consisting of Judicial Member, P.K. Choudhary, and a Technical Member, C.J. Mathew allowed the application and held that “We have carefully gone through the relevant documents, such as, the contract between the appellant and the raising contractors, the monthly bills raised by them on the appellant, the transit pass in ‘Form-G’, issued by the mining authority for the purpose of payment of mining royalty, and transportation of iron ore from the mines site. The raising contractors have not issued any other document in the name of the appellant, for the purpose of transportation of iron ore, which can be termed as a consignment note, as stipulated under Rule 4B of the Service Tax Rules,1994, as amended. As per the legal principles decided by different benches of Tribunal and relied upon by the appellant, the activities of transportation of iron ore in the present case, do not fall under the GTA services in terms of Sec.65(105)(zzp) of the Finance Act,1994, nor the raising contractors fall under the definition of ‘GTA’ as defined under Sec.65(50b) of the said Finance Act,” the tribunal said.

To Read the full text of the Order CLICK HERE