Recipient Of GTA Services Not Liable To Pay Service Tax Which Was Already Paid By Transport Agency: CESTAT

The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that recipients of goods transport agency (GTA) services are not liable to pay service tax that was already paid by the transport agency.The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that once the service provider discharges the service tax where the service recipient is liable to pay the service tax, the demand of service tax on the same service from the service recipient shall not be sustained on the ground that the particular service that already suffered the service tax cannot suffer the service tax twice on the same service.The department noted that, as per law, the appellant, as the recipient of GTA service, is liable to pay service tax on GTA under RCM under Rule 2(i)(d)(v) of the Service Tax Rules, 1994. The service tax paid by the goods transport agency is nothing but a deposit; therefore, the appellant is liable to pay the service tax. The deposit made by the goods transport agency is not a service tax on GTA, so the appellant is not entitled to the CENVAT credit.The assessee contended that even though the appellant is legally liable to pay the service tax when the service tax was discharged by the transport agency, demanding service tax from the appellant is double the liability of service tax on the same service, which is not legal and correct. Since the transport agency has discharged the service tax and the assessment of payment of the service tax has not been challenged, the credit of said amount is legally admissible to the appellant.The department contended that even though the transport agency has discharged the service tax since they are not liable to pay the service tax, the payment made by them is a deposit. Consequently, the appellant is liable to pay the service tax on GTA using the reverse charge mechanism, as well as the amount paid by the transport agency being deposited; the appellant is not entitled to cenvat credit.The tribunal held that the service tax paid by the transport agency in the facts of the present case is the payment of service tax and not a deposit. Therefore, no demand can be raised from the appellant, and for the same reason, once the amount paid by the transport agency is the service tax amount, the appellant is eligible for CENVAT credit.Counsel For Appellant: Mayur ShroffCounsel For Respondent: Prashant TripathiCase Title: Dhariwal Industries Limited Versus C.C.E. & C.-AnandCase No.: Service Tax Appeal No. 10603 of 2015-DBClick Here To Read The Order

Recipient Of GTA Services Not Liable To Pay Service Tax Which Was Already Paid By Transport Agency: CESTAT

Mariya Paliwala

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Recipient Of GTA Services Not Liable To Pay Service Tax Which Was Already Paid By Transport Agency: CESTAT

Mariya Paliwala

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INR 1099+GST

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