No Service Tax on Individual Truck Operators Transporting Goods without Consignment Note under ‘Goods Transport Agency’: CESTAT [Read Order]

In a recent ruling, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Bangalore Bench held that individual truck operators engaged for transporting goods without issuing consignment notes do not fall within the ambit of “Goods Transport Agency” under Section 65(50b) of the Finance Act, 1994.

The matter arose after a departmental audit in 2009 found that the appellant Doddanavar Brothers had not included ₹1.88 crore in transport charges for export of iron‑ore fines during 2007–08 while calculating service tax under the GTA category.

A show‑cause notice dated 22 April 2013 demanded tax, interest, and penalty on the alleged omission. The adjudicating authority confirmed the demand, and the Commissioner (Appeals), Mysore, upheld it in October 2016, prompting the present appeal.

Appearing for the appellant, Pradyumna G.H., argued that the company had merely hired individual trucks to move iron‑ore fines from its mines to the port of export, without any consignment notes - an essential element for classifying a transporter as a GTA under Section 65(50b) of the Finance Act, 1994.

Counsel also relied on the Tribunal’s earlier decision in Lakshminarayana Mining Company v. CCT, Bengaluru South GST [2019 (27) GSTL 745 (Tri. Bang.)], which held that individual truck owners are outside the service‑tax net.

On the other hand, Revenue has reiterated the findings of the learned Commissioner (Appeals).

After considering the matter, the tribunal observed that the absence of consignment notes meant the transporters were not GTAs and therefore not liable for service tax under the reverse‑charge mechanism. It also noted that the audit had concluded in 2009, yet the show‑cause notice was issued only in 2013, rendering the demand time‑barred in the absence of any evidence of suppression or misdeclaration.

Citing the Lakshminarayana Mining Company precedent, the Bench of D.M. Misra (Judicial Member) and  R. Bhagya Devi (Technical Member) held that “individual truck operators merely performing the activity of transport of goods are not covered under the taxable service of ‘Goods Transport Agency’.”

The tribunal also observed that, “besides, we find that the demand raised on the basis of the balance sheet figures audited by the Department in 2009 and the show-cause notice was issued in 2013; therefore, the demand is also barred by limitation. “

As a result, the tribunal held that the impugned order cannot be sustained and accordingly set aside, and the appeal was allowed with consequential relief.

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