2014 (10) TMI 878 - AT - Service Tax

Demand of Service Tax - Already paid under GTA services - Appellant as a transport agency discharged its tax liability on the amount of consideration, it received from its customers but Revenue created tax liability on the ground that by promoting the business of individual truck owners as the appellant does not have its own trucks and taken it on rent under an agreement , they have earned the said amount as commission and they are again liable to pay service tax on the said amount Held that the appellant has already discharged its service tax liability on the total collected amount from its customers, creating a duty liability in respect of a part amount from the same would amount to double taxation followed by the Tribunal s case in Jai Shree Road Lines v. CCE, Jaipur-II 2014 (1) TMI 717 - CESTAT NEW DELHI. - Decided in favour of appellant

Summary

Issues:
1. Tax liability on the amount saved by the appellant.
2. Double taxation concern.
3. Application of precedent from Jai Shree Road Lines v. CCE, Jaipur-II.

Analysis:

1. The appellant, a transport agency, entered into agreements with customers for transportation services but did not own trucks, instead hiring them from individual truck owners. The appellant saved a small amount for themselves from the transactions. The Revenue contended that this saved amount created a tax liability as commission earned by promoting the truck owners' business.

2. The appellant had already paid service tax on the total consideration received from customers under the category of Goods Transport Agency (GTA) services. The Tribunal rejected the Revenue's argument to impose tax on the saved amount, citing the risk of double taxation. Referring to the Jai Shree Road Lines case, where a similar demand was set aside to avoid double taxation, the Tribunal found no merit in the Revenue's position.

3. Relying on the precedent set by the Jai Shree Road Lines case, the Tribunal overturned the impugned order by the lower authorities, setting aside the tax demand on the saved amount and allowing the appellant's appeal with consequential relief. The decision highlighted the principle against imposing double taxation and upheld the appellant's discharge of service tax liability on the total consideration received from customers.

This judgment clarifies the tax liability issue concerning the saved amount by the appellant, emphasizes the prevention of double taxation, and underscores the importance of following established precedents to ensure fair treatment in tax matters.