Transportation of Passengers by Ropeway Exempt from Service Tax: CESTAT [Read Order]

Recently in a case , the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Eastern Zonal Bench, Kolkata, held that transportation of passengers by ropeway is exempt from service tax.

The decision came in response to appeals filed by the appellant, M/s. Damodar Ropeways & Infra Limited, which operates several ropeways in India, including in Sikkim and Jharkhand. The company had been subjected to demands for service tax by the Commissioner of Service Tax, Kolkata, for operating and maintaining these ropeways.

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The case centered on demands of service tax for various services rendered by the appellant between 2008 and 2013, including the operation of ropeways, maintenance of battery-operated vehicles, and handling coal transportation systems. One of the key contentions was that the appellant- company had charged fees from passengers for using the ropeway, which it argued was not a taxable service under the law. The appellant maintained that they provided transportation to the public, and that their activities were specifically exempt under Serial No. 23(c) of Notification No. 25/2012 ST, which exempts passenger transportation services by ropeway from service tax.

The CESTAT bench of Mr Ashok Jindal and Mr K Ankazhappan, after carefully examining the contracts between the appellant and the governments of Sikkim and Jharkhand, observed that the appellant was in fact right in asserting that they provided transportation services to the public. These services were deemed to fall under the exempt category, and the tribunal observed that the appellant had paid a license fee to the state governments but retained the remaining revenue for operating and maintaining the ropeways.

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In result, the Tribunal ruled in favour of the appellant, affirming that the transportation of passengers by ropeway during the assessed period was indeed exempt from service tax.

To Read the full text of the Order CLICK HERE 

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