Service Tax
TRT-2025-
Cestat New Delhi
Date:-12-09-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date - 12 September 2023
Parties: M/s Power Machines India Ltd. vs. Commissioner Service Tax (Adjudication)
Facts -
- The Appellant, M/s Power Machines India Ltd. is a subsidiary of M/s OJSO Power Machines, Russia, providing Erection, Commissioning and Installation Services, Management Maintenance and Repair Services also providing Goods Transport Agency Service.
- The appellant had entered into contracts with National Thermal Power Corporation Limited (NTPCL) and had supplied the goods.On these goods transport agency services availed by the appellant, it had discharged service tax as a recipient of the service.
- Three show cause notices dated 27.06.2011, 21.10.2011 and 19.12.2012 were issued to the appellant demanding service tax on the 2% transportation charges which it received from NTPC towards the transportation of the goods.
Issue -
- Whether the appellant is liable to pay service tax under Goods Transport Agency Service for collecting 2% transportation charges?
Order -
- The Tribunal observed that Appellant was not providing any Goods Transport Agency Service and in fact it had not issued any consignment note, as required under section 65 (50b). Nothing in the records show that the appellant was providing Goods Transport Agency Service to M/s NTPC. The person liable to pay service tax in case of Goods Transport Agency Service is the one who is liable to pay the freight for the transportation of such goods.
- In other words, it is the NTPC which would have been liable to pay service tax and not the appellant. It also needs to be pointed out that the appellant had hired the services of Goods Transport Agencies for transporting the goods and as the service recipient, it had discharged service tax on the amounts which it paid towards goods transportation.
- Hence it was held that there is nothing to establish that the appellant was providing Goods Transport Agency Service to the NTPC. It was only charging 2% towards the cost of transportation of goods. Even if the appellant had provided the Goods Transport Agency Service, it is the NTPC which would have been liable to pay service tax on such services and not the appellant.
- The Appeal is allowed.
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