2009 (9) TMI 71 - AT - Service Tax

GTA Service liability of recipient - Plea of the appellants is that they had not received services from a GTA - Commissioner has attempted to classify services received from goods transport owners/goods transport operators as GTA service defined under Section 65 (50b) - From the pronouncement by the Finance Minister the Budget Speech while introducing the Finance Bill, 2004, the legislative intent not to tax truck owners or truck operators is beyond doubt. In the absence of a finding that the appellants had received the service of transport of goods from any GTA, the impugned demand of Service tax, and penalties are liable to be set aside.

Summary

The appellate tribunal CESTAT, Bangalore, ruled in 2009 that Lakshminarayana Mining Company, Bangalore, was not liable to pay service tax under the category of Goods Transport Agency (GTA) for the period 1-1-2005 to 30-9-2006. The Commissioner had demanded Rs. 92,51,572 in short-paid service tax, of which LMC had paid Rs. 63,61,833. The Commissioner imposed penalties under the Finance Act, 1994, but reduced them to 25% if paid within 30 days. LMC appealed, arguing they had not received services from a GTA and had already paid the tax before the show cause notice. They cited various judgments supporting their claim. The tribunal found LMC had received services from transporters, not GTAs, and that the tax was paid wrongly. The tribunal set aside the demand and penalties, allowing the appeal. The decision was pronounced on 25-9-2009.