Appellate Tribunal rules cash transfer not taxable under Courier Agency service

The Appellate Tribunal, CESTAT Ahmedabad, ruled that a service provider is not liable to pay service tax on the transfer of cash under the category of Courier Agency service. The Tribunal determined that the transfer of cash does not fall under the definition of Courier Agency service, as it specifically covers the delivery of documents and goods, not cash. Citing a judgment by the Gujarat High Court, the Tribunal held that cash delivery by couriers is not a taxable service unless the cash is physically transported by a person. Consequently, the Tribunal set aside the impugned order and allowed the appeal on 25.07.2018.

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Issues involved:
Whether a service provider is liable to pay service tax on the transfer of cash under the category of Courier Agency service.

Analysis:

The Appellate Tribunal, CESTAT Ahmedabad, addressed the issue of whether a service provider is liable to pay service tax on the transfer of cash from one branch to another branch and subsequently to their clients under the category of Courier Agency service. In this case, the appellant did not appear, while Shri L. Patra, Assistant Commissioner (AR), represented the Revenue and reiterated the findings of the impugned order.

Upon careful consideration of the submissions made by the Assistant Commissioner (AR) and a review of the records, the Tribunal found that the transfer of money in cash by a Courier Agency does not fall under the definition of Courier Agency service. The definition of Courier Agency service specifically covers only the delivery of documents and goods, not the transfer of cash. The Tribunal referred to a judgment by the Hon'ble Gujarat High Court in a similar case, where it was held that the service provided by couriers/angadias for the delivery of cash is not a taxable service under the definition of "courier agency." The High Court clarified that if the cash provided to the courier/angadia for delivery is actually transported to the place of delivery by a person, then it would attract the provisions of the Act and be considered a taxable service.

Based on the precedent set by the Gujarat High Court's judgment, the Appellate Tribunal set aside the impugned order and allowed the appeal. The Tribunal's decision was pronounced in court on 25.07.2018.

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