Goods Transport Agency service not attracted where farmers transport their own sugarcane and no consignment note is issued.

Service tax under reverse charge was not payable on transport subsidy paid to farmers for bringing sugarcane to the factory, because the farmers transported their own goods in their own vehicles and no service provider-service recipient relationship arose. The Goods Transport Agency entry applied only where goods were transported by road by a person acting as a GTA and issuing a consignment note; although tractor trolleys may fall within the broad meaning of goods carriage, the absence of a consignment note was fatal. The subsidy was therefore not consideration for taxable GTA service, and the demand, interest, and penalties were unsustainable.

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Issues: Whether service tax was payable under reverse charge on the transport subsidy paid to farmers for bringing sugarcane to the factory, treating the activity as Goods Transport Agency service.

Analysis: The farmers transported their own sugarcane in their own vehicles for delivery to the factory, so the movement was only of their own goods and did not create a service provider-service recipient relationship with the assessee. The taxable entry for Goods Transport Agency service required transport of goods by road in a goods carriage by a person who issues a consignment note. Although tractor trolleys could fall within the broad notion of goods carriage, the essential requirement of a consignment note was absent. On these facts, the payment described as transport subsidy did not constitute consideration for a taxable GTA service. The view was consistent with earlier decisions holding that similar payments to farmers for sugarcane transport were not liable to service tax under reverse charge.

Conclusion: The transport subsidy was not chargeable to service tax as Goods Transport Agency service, and the demand, interest, and penalties were unsustainable.

Ratio Decidendi: Liability under Goods Transport Agency service arises only where transport of goods by road is provided by a person acting as a GTA and issuing a consignment note; a farmer transporting his own goods for sale to the buyer does not render such taxable service.

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