9911796707
TMI Blog2025 (3) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the appellant vis a vis Notification No 30/2012-ST which provides for payment of service tax on reverse charge basis by the person liable to pay freight. From perusal of the documents i.e. consignment note, it is quite evident that both consigner and consignee are corporate entity. The freight in the present case is paid by the consignee located outside India, in Nepal. The liability to pay service tax in such case would be on consignee and not on GTA as per notification no.30/2012 dated 20.06.2012 - From Rule 10 of the Place of Provision of Services Rule, 2012, it is evident that in case of Good Transport Agency Service the place of provision of service is location of the person liable to pay service tax. In the present case the person liable to pay service tax is the consignor or consignee as the case may be and the location of the said person will be the place of provision of service. Extended period of limitation - HELD THAT:- By combined and harmonious reading of the Rule 2(1) (d) of Service Tax Rules, 1994, Rule 10 of Place of Provision of Services Rules, 2012 and Notification No 30/2012-ST, it is found that appellant was having a reason to bonafide belief that no serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirmed at (i) above. (iii) I also impose a penalty of Rs.78,16,912 [Seventy Eight Lakhs Sixteen Thousand Nine Hundred and Twelve only] upon the party, under Section 78 of the Finance Act, 1994 read with Section 142, Section 173 and Section 174 of CGST Act. 2017. However, in terms clause (11) of second proviso of Section 78, the said penalty is liable to be reduced to 25% of the penalty as mentioned above, provided that the Service Tax as determined in (i) above is also paid along with interest as mentioned in (ii) and reduced penalty amount within 3 days from the date of communication of this order. (iv) I also impose a penalty of ₹ 10,000/- (Rupees Ten Thousand Only) upon the party under the provisions of Section 77 (1) (d) of the Finance Act. 1994 read with Section 142, 173 and Section 174 of CGST Act, 2017 for not paying Service Tax electronically under the Act. (v) I refrain from imposing any penalty / late fees upon the party under the provisions of Section 70 of the Finance Act, 1994 read with Rule 7 C of Service Tax Rules, 1994 read with Section 142, Section 173 and Section 174 of CGST Act, 2017 for non-submission of two (02) ST-3 Returns. (vi) I also impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant provisions should not be imposed for not depositing of the service tax recovered from parties and crediting to Govt. Exchequer." 2.4 This show cause notice was adjudicated as per the Order-in-Original referred in para 1 above. 2.5 Aggrieved appellant have filed appeal before Commissioner (Appeals) which has been dismissed as per the impugned order. 2.6 Aggrieved appellant have filed this appeal. 3.1 We have heard Shri Amit Tiwari Chartered Accountant for the appellant and Smt Chitra Srivastava Authorized Representative for the revenue. 3.2 Arguing for the appellant learned Chartered Accountant submits that- * They are goods transport agent and in their case the tax is to be paid on reverse charge basis by the service recipient either by consigner or by consignee. * All the clients to whom the services are being provided are located in Nepal and the payments have been received from them from outside India. Hence, these services should qualify as export of service. * In any case there cannot be any liability of service tax on them for the basic reason that in case of GTA services tax liability lies upon either on consigner on consignee who makes the payments to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant in relation to the transportation made inside India, the appellant only charges the commission from the truck owner and the freight has been received by the truck owner from the person who takes the delivery and the appellant nowhere is involved in any direct transportation inside of India and is only a commission agent and the appellant on 06.04.2016 discharged the service tax payment of Rs.6,24,756/ on the bonafide belief that the commission received by the agent is a liability under the Service Tax, but according to provision of law, the appellant firm is not liable to pay Service Tax and therefore, the aforesaid amount is liable to be refunded to the appellant. 5.1 In view of the facts brought out in the SCN dated 27.04.2021 and after going through the grounds of appeal, I find that the following points needs to be decided by me in the instant case:- (i) Whether any benefit of exemption for providing services during the impugned period can be extended to the appellant under the Act/exemption notification or not? (ii) Whether the demand of service tax of Rs. 78,16,912/- under the proviso to Section 73(1) of the Finance Art, 1994 along with interest un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay freight (either himself or through his agent) for the transportation of goods by road in a goods carriage. But, as per proviso to Rule 2(1)(d) ibid, if the person liable to pay freight is located in non-taxable territory. then the person liable to pay service tax shall be the service provider. In simple words, in all the cases of transportation of goods by road, by GTA, where the location of the person liable to pay freight is Outside India or in the state of Jammu & Kashmir, the person liable to pay service tax is CITA itself. In this case appellant in located in taxable territory and it transports consignment of clinker from Batna & Malhar (MP) to Banke in Nepal (Non Tromble Territory) and the person liable to pay freight in located in Nepal which is in nan-taxable territory, thus, as per proviso to Rule 2(1)(d) ibid, the person liable to pay tax in the service provider i.e. appellant in this case. Since in the case of GTA services the place of provision of service is the location of the person liable to pay tax, as determined in terms of Rule 2(1)(d) of Service Tax Rules, 1994 and in this case person liable to pay tax in appellant, therefore, place of provision of service is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in terms of Section 75 of the Act 1 find that where any amount is payable as tax but not paid/paid belatedly, it results in financial loss to the exchequer and corresponding financial gain to the assessee. Therefore, if the Service Tax has been paid beyond the due date, interest is chargeable in terms of statutory provisions mentioned above. Therefore, I find that in this case, the demand/ recovery of interest on Service Tax not paid by the appellant, has correctly been ordered by the Adjudicating Authority 5.9 As regards imposition of penalty under section 78 of the Act, it is observed that the appellant had not disclosed the actual receipt regarding taxable service provided by them in their ST-3 returns. They consciously und deliberately suppressed the fact which came into the notice of the Department during the enquiry on the basis of third party data received from the Income Tax Department. This clearly indicates the intention of the appellant to evade the payment of Service Tax. Thus, I find that the imposition of penalty under Section 78 is justified. 5.10 I uphold the penalty of Rs. 10,000/- imposed by the Adjudicating Authority upon the appellant under the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al for which payments are received by him from overseas clients in India, who undisputedly are corporate entities. Thus, the liability to pay service tax is on the consignee. By referring to provisio to the said rule Commissioner (Appeal) has concluded that the liability to pay service tax falls on the appellant. 4.5 While coming to the said conclusions impugned order also rejected the arguments advanced by the appellant vis a vis Notification No 30/2012-ST which provides for payment of service tax on reverse charge basis by the person liable to pay freight. 4.4 Some of the documents for transaction and transportation are reproduced below:- 4.5 From perusal of the above documents i.e. consignment note, it is quite evident that both consigner and consignee are corporate entity. The freight in the present case is paid by the consignee located outside India, in Nepal. The liability to pay service tax in such case would be on consignee and not on GTA as per notification no.30/2012 dated 20.06.2012. The relevant excerpts from the Notification are reproduced below: "(ii) provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of services. For this purpose rules were formulated which handled the subject of place of provision of services somewhat indirectly, confining to define the circumstances in which a provision of service would constitute import or export. The new rules will, on the other hand, determine the place where a service shall be deemed to be provided, in terms of section 66C of the Finance Act, 2012, read with section 94 (hhh) of Chapter V of the Finance Act, 1994. Under Section 66B, a service is taxable only when, inter alia, it is "provided (or agreed to be provided) in the taxable territory". Thus, the taxability of a service will be determined based on the "place of its provision". The 'Place of Provision of Services Rules, 2012' will replace the 'Export of Services, Rules, 2005' and 'Taxation of Services (Provided from outside India and received in India) Rules, 2006." 4.8 From the above explanation it is evident that Place of Provision of Service Rules, 2012 are the factor relevant for determining the taxability of the services. In the Rule 10 category lays down that the in case of Good Transport Agency Service the place of provision of service will be location of the person ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
