Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  The GSTN has issued an Advisory dated 21.04.2026 about the introduction of an Offline Tool for the Invoice Management System (IMS)  *  CBIC extends due dates for filing of FORM GSTR 3B  for the month of April 2026 *  Interest cannot be imposed in adjudication order, if not demanded/quantified in show cause notice : Allahabad HC *  Wheelchairs with toileting facility eligible for exemption: CESTAT affirms customs duty exemption to importer *  Industries urge GST council to allow inverted duty refunds on input services *  Tamil Nadu GST dept introduced virtual hearing facility for GST appeals under under section 107 of the TNGST act: detailed guidelines  *  CIC urges authorities to implement GST evasion complaint tracking system *  Even if the assessee opts "NO" for personal hearing in form DRC-06 ,The mandatory requirement under section 75(4) to grant opportunity of hearing cannot be waived:Gujarat High Court  *  Glufosinate imports curbs imposed by govt *  Government extends Re-import period for exported cut & polished diamonds *  CIC flags lack of tracking system for tax evasion complaints,urges GST authorities to improve transparency *  No Custodial Interrogation needed in GST fraud case based on documentary evidence already in Department's Possession : Chattisgarh HC *  Orders under section cannot be sustained if passed without considering the taxpayer's objections and without granting a personal hearing:Gujarat High Court *  Mere cancellation of supplier's registration cannot,by itself,justify denial of ITC or cancellation of the recipient's registration:Bombay High Court *  High Court sets aside GST notice citing factual errors and natural justice violations *  Provisional Bank Attachment under Section. 110 of Customs Act Unsustainable Beyond Statutory period without Extension order: Bombay HC orders to defreeze accounts *  Post Clearance MRP Alteration by Distributor Does not attract Differential Customs Duty: CESTAT *  DGFT Expands scope of 'Screws' classification under RoDTEP Scheme  *  E-way bills surze to all time high of 140.6 million in March *  GST Exemption Allowed on Pure Labour Services for Standalone Houses: AAR  *  GST Payable Only on Margin in Second-Hand Car Sales, Subject to Strict Conditions and No ITC Claim: AAR *  DGFT rolls out procedure for allocation of calcined coke *  GST portal update : Pre-deposit amount now editable in Appeals *  J&K HC declared TMT scrap a 'Specified Good' eligibile for GST refunds under Support Scheme  *  Pigmy agents are employees of banks; no GST can be levied on commission  paid to them : Karnataka HC *  DGFT Revises HS Code Description for Screws Under RoDTEP *  GST Registration Cancellation Invalid Without Proper Service of Notice: Allahabad High Court. *  Bengaluru CGST | GST Backlog Appeals Deadline Fixed at June 30, 2026 *  No Time Bar on Refund of Service Tax for Services Not Rendered: CESTAT  Remands Indiabulls Case for Unjust Enrichment Check. *  Supreme Court Holds Renewable Energy Incentive Must Benefit Generators, Not Be Adjusted in Tariff
Subject News *   Delhi HC Quashes Order, Says Reminder Cannot Validate Improperly Served GST SCN *  KARNATAKA HIGH COURT REMANDS GST SHORTFALL MATTER DUE TO ABSENCE OF PERSONAL HEARING   *  CESTAT cancels confiscation and penalties on imported computer cabinet cases: Custom duty restricted to 111 surplus units *  Deposit of tax during search or investigation cannot be treated as 'Voluntary Payment' : Bombay High Court *  Section 76 of the CGST cannot be invoked where the tax has already been duly deposited, even if through another registration of the same entity: Madras High Court *  Sec 74 allows use of material regardless of source; illegality or flaws in section 67 search do not vitiate valid adjudication: HC *  Inter-State transfer of ITC on Amalgamation permissible as given under section 18(3) read with rule 41 of the CGST rules, 2017: Gujarat High Court *  HC: No GST on commisson paid to Pigmy Agents *  IGST refund denial on illegible bill of lading invalid absent chance to furnish docs; merit reconsideration in appeals directed: HC *  ITC is not admissible on GST paid on leasehold rights of land used fpr setting up an air seperation plant: AAAR,Tamil Nadu *  GST: No penalty under Section 74 after voluntary ITC reversal due to non-existent supplier : High Court *  TN AAAR denies GST ITC on Land Lease under Sec. 17(5)(d) for setting up plant and machinery *  GST proceedings quashed as notices sent to old address, despite updated address in registration *  Importer Can’t Be Penalised for Alleged IGCR Procedural Lapses Without Evidence of Departmental Error: CESTAT *  Structured Healthcare Training Not ‘Charitable Activity’, 18% GST Payable: AAR  *  CESTAT As The Appellate Authority For Central Sales Tax Disputes: A Paradigm Shift Under Finance Act, 2023 *   Rs. 25K Cost Imposed On SGST Joint Commissioner for Attaching Bank  Accounts Without Forming Mandatory “Opinion”: Bombay HC *   Ex-Parte GST Order Without Hearing Violates Natural Justice: Karnataka  High Court Quashes Adjudication and Bank Attachment.  *   Retrospective GST Cancellation Can’t Invalidate Genuine Transactions:  Jaipur Commissioner (Appeals) Quashes Rs. 95,670 ITC Demand. *   GST Pre-Deposit Non-Compliance: Allahabad High Court Allows Appeal  Subject to Rs. 30 Lakh Balance Deposit, Recognises Offline Filing. *  Documentary Nature of Evidence: Allahabad High Court Grants Bail in Rs. 32.66 Crore Fake ITC Fraud Case *  Supreme Court Flags Systemic Bias in Army’s Permanent Commission Process for Women Officers *  Re-Determination of Land Compensation Can Be Based on Appellate Court Awards, Clarifies Scope of S. 28-A: Supreme Court. *  Supreme Court Imposes Rs. 5 Lakh Costs On Rent Authority Officer For Acting Beyond Jurisdiction. *  DGGI Meerut | Court Denies Bail to Accused in Claiming Fake ITC And Export Refunds *  Denial of GST Rate Revision Benefit to Contractor Violates Article 14: Rajasthan HC *  GST Registration Cancellation for Non-Filing of Returns: Gauhati High Court Directs Restoration on Compliance. *   Supreme Court Quashes FEMA Adjudication Orders, Revives Proceedings at  Show Cause Stage. *   Higher Rank, Harsher Punishment Justified: Supreme Court Restores Dismissal  of Bank Manager in Misappropriation Case. *   Limitation for Export Refund to Be Counted from Foreign Exchange Realisation,  Not From Export Invoices Issuance: CESTAT  

Comments

Print   |    |  Comment

PJ/CASE LAW/2016-17/3127

Whether engaging drivers for transportation of goods on private trucks amounts to provision of GTA service?

Case:-M/s SVR ELECTRICALS PVT LTD Vs COMMISSIONER. C & CE, GUNTUR

Citation:-   2016-TIOL-1281-CESTAT-HYD
 
Brief Facts:-The appellants are engaged in the manufacture of Electrical Distribution Transformers and are registered for the category of Goods Transport Agency Service. During the course of audit it was observed that appellants had entered into contract with M/s Nepal Electricity Authority, Nepal for supply of 628 nos. of electrical transformers. The contract value was inclusive of transportation charges of Rs.69,00,000/- which was to be borne by appellants as per agreement between appellant and M/s Nepal Electricity Authority. The appellants contested the demand of service tax stating that duty having been paid on FOR basis they are not liable to pay service tax on freight charges. On scrutiny of invoices, it was observed by department that in the invoices, the assessable value is not inclusive of freight. That appellants suppressed the value of freight by not informing the department about the freight element. A show cause notice was issued which after adjudication, confirmed the demand of service tax along with interest and also imposed equal amount of penalty under Section 78 of the Finance Act, 1994. Aggrieved by this order, the appellants preferred appeal before the Commissioner (Appeals) who vide the order impugned herein upheld the same.
 
Appellant’s Contention: -The learned counsel appearing for appellant has furnished detailed written submissions and consented /requested that the case be decided basing on the written submission. Therefore, the case was taken up for disposal, after perusal of appeal, written submissions and hearing the department representative. The main plea raised in the written submission is that the trucks were driven by drivers of the appellant. That being private trucks they do not fall within the definition of"Goods Transport Agency" . The appellant has relied on the judgment of CESTAT in Lakshmi Narayana Mining Co. Vs. CST, Bangalore 2009(16) STR 691(Tri)= 2010-TIOL-122-CESTAT-BANG. It is also submitted that the show cause notice is time barred. That there was no suppression of facts on the part of the appellant. The freight charges were shown in the invoices and these invoices were signed by the jurisdictional Officer and the same was also declared in the I.T. Returns. That therefore, the demand is time barred.

Respondent’s Contention:-The learned DR Shri M.S. Naskar contended that the decision in Lakshmi Narayana Mining Company case (Supra) is no longer good law. That the Hon'ble High Court of Madras in CCE, Salem Vs Suibramia Siva Co-operative Sugar Mills Ltd. 2014 (35) STR 500 (Mad) has held that the use of the word "any person" in the definition of "Goods Transport Agency" includes individual truck owners also. Similar view was taken in the case of Sree Balaji Transport Vs CCE & ST, Tirupathi 2015 (38) STR 651 (Tri-Bang). In the case of Sree Balaji Transport, the tribunal examined the issue whether transportation undertaken by individuals owning and operating lorry and truck is subject to service tax. The Tribunal observed that under Section 60(506), Goods Transport Agency means "any person who prides service in relation to transport of goods by road and issues consignment note, by whatever name called" . The language of the section is unambiguous and that 'any person (including individuals) who provides service in relation to transport by road is liable to service tax".
 
Reasoning Of Judgment: -The Tribunal heard the contentions and concluded that in view of judgments relied upon by the DR, on merits, the issue is against the assessee. The next ground raised is that the show cause notice dated 15-09-2009 for the period 20-05-2008 to 16-06-2008 is barred by limitation. The appellant contends that there was no suppression with intention to evade payment of service tax. It is the case of the appellant that the freight charges were shown in the invoices and that these invoices were signed by the jurisdictional officer. As per the agreement the appellant has agreed to bear the transportation charges. The appellant is registered for "Goods Transport Agency Services". In the invoices, the appellant has shown the freight charges separately. But the appellant failed to discharge the service tax liability on the freight charges collected. In such score, the invocation of extended period of limitation is legal and proper.
 
In view of the above, it was found that the impugned order does not call for any interference. In the result, the appeal is dismissed.
 
Decision:-Appeal dismissed.

Comment:-The essence of the case is that since in view of judgments wherein service tax is payable even in case of individual truck owners,  the appellant suppressed the value of freight by not informing the department about the freight element. Since, the appellant failed to discharge the service tax liability on the freight charges collected when service tax was to be discharged by them, it is clear case of non-payment of service tax. Furthermore, the invocation of extended period of limitation is also legal and proper and the appeal fails on merits as well as limitation.
 
Prepared By:- Alakh Bhandari
 
 
 
 
 
 
 
 

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com