2019 (2) TMI 143 - AT - Service Tax

Business Auxiliary Services - amount collected as co-loaders from other courier agencies - Held that - This issue is no longer res integra and it has been settled by the hands of Tribunal in the case of United Business Xpress India Pvt. Ltd. 2016 (12) TMI 440 - CESTAT NEW DELHI , where it was held that The transaction between the appellant and the other courier agency is on principal to principal basis. It cannot be said that the service has been rendered on behalf of the courier agency. Consequently, activity cannot be covered under the definition of BAS. These services are not chargeable under the head of Business Auxiliary services - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether coloader charges received by the appellant from other courier agencies can be charged to tax under Business Auxiliary Services.

Analysis:
The appellant, a courier company, provided services as a co-loader to another courier company. The lower authority confirmed demands seeking to charge the amount collected as co-loaders under Business Auxiliary Services. The appellant appealed, arguing that co-loader services are not chargeable to service tax based on a CBEC circular. The circular clarified that co-loaders provide services to courier agencies, not directly to customers, and the charges are included in the final service charged to customers. The Revenue sought to charge service tax under Business Auxiliary Services, but the appellant relied on precedents where co-loader charges were not taxed under this category. The Tribunal noted that the issue had been settled in previous cases and held that coloader charges are not taxable under Business Auxiliary Services. The appeal was allowed, and the impugned order was set aside.

This judgment revolves around the taxation of coloader charges received by the appellant from other courier agencies under Business Auxiliary Services. The appellant argued that based on a CBEC circular, co-loader services are not directly provided to customers and are included in the final service charged to customers by courier agencies. The Revenue contended that these services should be taxed under Business Auxiliary Services to promote and enhance business. However, the Tribunal, following precedents, held that coloader charges are not chargeable under Business Auxiliary Services. The decision was based on settled law and previous judgments, including the case of United Business Xpress India Pvt. Ltd. The appeal was allowed, and the impugned order was set aside, providing consequential reliefs to the appellant.