Tobacco Transport By Individual Truck Owners Not Goods Transport Agency: CESTAT Quashes Service Tax Demand

In an order dated November 28, 2025 the Bench comprising Mr. A.K. Jyotishi (Technical Member) and Mr. Angad Prasad (Judicial Member) clarified that even if a person had provided Goods Transport Service but has not issued the consignment note, Service Tax from that person cannot be recovered under the category of GTA. The CESTAT rejected the contention of the Service Tax Department that consignment notes may be, in any form like chit, bill even weighing slip given to the truck owner may be treated as consignment note.

Appellant were engaged in procurement of Tobacco leaves from auction yards of Tobacco Board process. For transportation of tobacco leaves or redried threshed leaves and stem, it directly engaged truck owners / operators, who would carry the goods and collect their transport charges. The goods were always accompanied by the challans / documents of the Appellants, the truck owners / operators do not issue any documents.

The Service Tax Department took a view that even if the truck operators /owners render transportation service, Service Tax under GTA was payable on account of the amendment to the definition of Goods Transport Agency brought on May 01, 2006, which replaced “commercial concern” by “any person”. It claimed that slips/challans issued could be treated as consignment notes. Resultantly, service tax was demanded with interest, and penalties for the periods July 2012 to March 2013 for Rs. 1,75,373, April 2013 to March 2014 for Rs. 10,918, April 2014 to March 2017 for Rs.2,11,873.

The CESTAT referred to definition of 'consignment notes' in terms of Explanation to Rule 4B Service Tax

Rule, 1994 to state that a 'consignment note' would mean a document having name of consignor and consignee, contain vehicle registration number, describe the goods being transported, state the origin and destination as well as should specify the transport agency.

Further, the CESTAT distinguished decisions in case of M.L. Agro Products, S.V.R. Electricals Pvt Ltd., (supra) and Coromandel Agro Products & Oils and noted that a catena of judgments like Chartered Logistics, Vaishnav Marbles, Bothra Shipping Services confirm that without consignment note, no GTA service exists.

Accordingly, the CESTAT set aside demand of service tax, interest and penalty under GTA service category.

Case Detail: Indian Tobacco Traders vs. Commissioner Of Central Tax Guntur - GST

Case No.: Service Tax Appeal No. 30390 of 2018

For Appellant: Advocate S. Sankaravadivelu

For Respondent: Authorised Representative Mr. A. Rangadham