2018 (11) TMI 172 - AT - Service Tax

CESTAT Hyderabad: Appellant not liable for service tax on freight charges paid to individual transporters

The Appellate Tribunal CESTAT Hyderabad ruled in favor of the appellant in a case concerning service tax liability under the reverse charge mechanism for ... GTA Service - transportation/freight charges to individual transporters during the period 01.05.2008 to 30.11.2008 - taxability - Held that:- This Bench in the case of Sai Sudhir Infrastructures Limited [2018 (5) TMI 1678 - CESTAT HYDERABAD] on similar issue has held that service tax liability under reverse charge mechanism does not arise for the freight charges paid to individual truck owners - appeal allowed - decided in favor of appellant. Issues:- Service tax liability on the appellant under reverse charge mechanism for transportation/freight charges paid to individual transporters.Analysis:The appeal before the Appellate Tribunal CESTAT Hyderabad involved the issue of service tax liability on the appellant under the reverse charge mechanism for the amount paid as transportation/freight charges to individual transporters during a specific period. The Revenue contended that the amount was taxable under GTA service, while the appellant argued that payments were made to individual and private truck owners not falling under GTA services. The lower authorities held in favor of the tax liability. The appellant's counsel highlighted that a similar issue had been decided by the Larger Bench of the Tribunal in previous cases, emphasizing that the issue had attained finality in the hands of the Tribunal. The Tribunal, considering previous decisions and the contentions presented, concluded that the impugned order was unsustainable. Citing various precedents, the Tribunal held that service tax liability under the reverse charge mechanism did not arise for the freight charges paid to individual truck owners. Consequently, the impugned order was set aside, and the appeal was allowed.This judgment showcases the application of legal principles and precedents in determining service tax liability under the reverse charge mechanism for payments made to individual transporters. The Tribunal's analysis considered past decisions and established that the appellant was not liable for service tax in this scenario. The reference to specific cases and the Tribunal's consistent interpretation of the law provided a strong basis for setting aside the lower authorities' decision and allowing the appeal. The judgment highlights the importance of legal arguments, precedents, and the interpretation of relevant laws in resolving tax liability disputes.