2018 (5) TMI 1139 - AT - Service Tax

Liability of service tax - GTA services - transportation of sugar cane - no consignment note or loading receipt is issued - reverse charge mechanism - Held that - job of sugar cane harvesting and its transportation upto the appellant s factory was entrusted to Sangh by the appellant and accordingly Sangh arranged all the vehicles and has done the job for the appellant and in turn has recovered the agreed charges/commission for the said job - job of harvesting and transportation is not mere transportation but is a package deal of harvesting and transportation of sugar cane by arranging the tractor and vehicle upto the appellant s factory. In this activity, it is admitted fact that for the so called GTA service, no consignment note was issued. Therefore, the said service cannot be construed as a GTA service - In the case of Kranti SSK Ltd. 2017 (6) TMI 275 - CESTAT MUMBAI , this Tribunal relied upon the various judgments and held that no Service Tax is chargeable on the sugar mills for transportation of sugar cane and the appeal was allowed. The alleged service of GTA is not liable for Service Tax - appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of liability for Service Tax on transportation charges paid by appellant under GTA service and reverse charge mechanism.

Analysis:
The case involved the liability of M/s Someshwar Sarva Seva Sangh (referred to as 'Sangh') for paying Service Tax on transportation charges for sugar cane. The Department argued that the charges were taxable under the GTA service and reverse charge mechanism. The appellant contended that previous Tribunal judgments supported their view that such charges were not taxable. The Tribunal examined the arrangement where Sangh handled harvesting and transportation of sugar cane for the appellant without issuing consignment notes. The Tribunal determined that the service provided was a package deal of harvesting and transportation, not just transportation, and thus not subject to GTA service tax. Citing precedents like Kranti SSK Ltd., Bhima SSK Ltd., and others, the Tribunal held that the transportation of sugar cane to sugar mills was not taxable under the GTA service. The Tribunal emphasized that the issue was settled in various judgments, maintaining a consistent view that such services were not liable for Service Tax.

Regarding a specific case involving payment for transportation of sugarcane, the Tribunal referenced a previous judgment where the appeal was allowed in favor of the appellant. The Tribunal highlighted that in similar cases concerning the transportation of sugar cane, a consistent view was taken that such services were not liable for Service Tax. Citing judgments like Saswad Mali Sugar Factory Ltd., Shreenath Mhaskoba SSK Ltd., and others, the Tribunal reiterated that transportation of sugar cane did not fall under the purview of Service Tax. Consequently, the Tribunal set aside the impugned order and allowed the appeal, emphasizing the consistent stance taken in various judgments regarding the non-taxability of GTA services related to the transportation of sugar cane.