In a recent case, the Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) set aside the demand for service tax since there was no Goods Transport Agency( GTA ) service in absence of consignment notes.
The appellant, M/s Savla Chemicals Limited challenged the demand for service tax. The appellant pointed out that the demand has been made under the category of goods transport agent service. He pointed out that the appellants are not receiving any goods transport agent service. He pointed out that they are hiring tankers on monthly basis.
He pointed out that since there is no service of goods transport agent involved, no service tax could have been issued, the order in appeal stated that consignment notes have been issued. It was pointed out that the appellants were hiring vehicles on monthly basis and were bearing the cost of toll charges and a certain amount for each kilometre of a run of the vehicles.
It was apparent that the transporter is taking the entire responsibility for the goods for the route and the transporter is not issuing any LRs for the purpose of these goods. The appellants are issuing delivery challans. It was evident that no consignment notes are issued by Girish Logistics, i.e. the supplier of vehicles.
If the persons from specified categories supply the service of GTA in the taxable territory, the receivers who get such services become liable to pay GST instead of the supplier of services but the GTA remains liable for collecting and payment of tax @ 12% (6% CGST + 6% SGST).
The two-member Coram comprising Mr Ramesh Nair, Member (Judicial) and Raju, Member (Technical) observed that since no consignment notes were issued to the transporter no GTA service has been provided. The CESTAT viewed that the service of goods transport agent is not supplied and set aside the demand.
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