2018 (2) TMI 719 - AT - Service Tax

Service tax on GTA recipient upheld despite transporter payment, Tribunal prevents double tax deposits

M/s. K.V. Enterprises Versus Commr. of Central Excise, Allahabad

The Tribunal allowed the Revenue's appeals, confirming the obligation of the GTA service recipient to pay service tax despite the transporters already ... Liability of service tax - reverse charge mechanism - services of a transporter for movement of their inputs - Held that: - there is no dispute about the fact that the service tax deposited by the transporters with the department. As such the objection of the Revenue cannot be appreciated, as it would amount to double deposit of the same amount of service tax on the services - appeals are allowed by restoring the orders of the original adjudicating authority. Issues:1. Payment of service tax by the appellant on reverse charge basis.2. Dispute regarding the obligation to pay service tax by the GTA service recipient.3. Double deposit of service tax on the same services.Analysis:1. The appellants availed the services of a transporter for moving their inputs and paid service tax to the transporters, who, being registered service providers, deposited the tax with the Revenue. The Assistant Commissioner dropped the proceedings against the appellants as the transporters had already deposited the service tax.2. The Revenue filed appeals before the Commissioner(Appeals) challenging the dropping of proceedings. The appellate authority acknowledged that the transporters had indeed deposited the tax but held that the obligation to pay service tax rested with the GTA service recipient. Consequently, the demands were confirmed, and the Revenue's appeals were allowed.3. The Tribunal noted that the service tax had been deposited by the transporters with the department, and there was no dispute about this fact. The Tribunal cited precedents to emphasize that objecting to this would lead to double deposit of the same tax amount on the services. The Tribunal referred to previous cases to support this position.4. Considering the above, the Tribunal found no valid reasons to uphold the impugned orders. Consequently, the orders were set aside, and the appeals were allowed by restoring the original adjudicating authority's orders. The operative part of the order was pronounced in the open court.This judgment clarifies the obligation to pay service tax on reverse charge basis, the role of the GTA service recipient in such transactions, and the prevention of double deposit of service tax on the same services. The decision provides a clear interpretation of the law and sets a precedent based on previous cases to guide similar situations in the future.