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of <h1>Freight payer liable for service tax on transportation charges under Rule 2(1)(d)(v)</h1> The appeal challenged the confirmation of demand for service tax on transportation charges, focusing on whether the consignor or consignee is liable under ... GTA service - liability to pay service tax on freight is on the consignee or consignor - consignor get the reimbursement from the consignee - penalty under Section 77 & 78 - Held that:- If the person is covered under the category (a) to (g) of clause (v) of Rule 2(1)(d) above and if that person pays the freight towards the GTA services, he is that person who is liable to discharge the service tax. In the present case, it is undisputed fact that the GTA services were provided by the transporter for transportation of the goods to the appellant through its consignee. For the said GTA services it is the appellant who has paid the freight to the transporter. - they have taken reimbursement from the consignee after paying freight to the transporter. The argument that, since they were not liable to pay the freight to the transporter, they are not liable for service tax is not acceptable - appellant is legally responsible to discharge the service tax. - decision of S.R. Drugs [2011 (6) TMI 493 - CESTAT, MUMBAI] distinguished - Decision in the case of Essar Logistics [2014 (6) TMI 763 - CESTAT AHMEDABAD] followed - Decided against assessee. Issues:1. Liability for payment of service tax on transportation charges.2. Interpretation of Rule 2(1)(d)(v) of the Service Tax Rules, 1994.3. Applicability of judgments in similar cases.Analysis:1. The appeal challenged the confirmation of demand for service tax on transportation charges. The appellant paid the freight to the transporter and later received reimbursement from the consignee. The issue revolved around whether the consignor or the consignee is liable to pay the service tax under Rule 2(1)(d)(v) of the Service Tax Rules, 1994.2. Rule 2(1)(d)(v) stipulates that the person who pays or is liable to pay freight for GTA services is responsible for service tax. The appellant contended that since the consignee was supposed to pay the transportation charges, they were not liable for service tax. However, the Revenue argued that regardless of any arrangement, the person who pays the freight is legally obligated to discharge the service tax liability.3. The appellant relied on a Tribunal judgment in a similar case, while the Revenue cited a Division Bench judgment supporting their position. The Tribunal analyzed the conflicting judgments and emphasized that as per Rule 2(1)(d)(v), only the party paying the freight is liable for service tax, leading to the dismissal of the appeal based on the appellant's liability for service tax as the paying party.This detailed analysis of the judgment highlights the key legal issues, interpretations of relevant rules, and the application of precedents to determine the liability for service tax on transportation charges.
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