GTA service tax liability requires a consignment note; sugar mill not liable on simple sugarcane transport.

Service tax liability under reverse charge arose only if the transporter qualified as a Goods Transport Agency and issued a consignment note. As the transporters had not issued consignment notes, the movement of sugarcane was treated as simple transport rather than GTA service, so the sugar mill could not be fastened with tax as the recipient. The service tax demand was therefore unsustainable.

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Issues: Whether the respondent, a sugar mill arranging transport of sugarcane and adjusting freight charges against cane payments, could be treated as the recipient of Goods Transport Agency services and made liable to service tax on reverse charge basis.

Analysis: Liability to service tax on transport services under the relevant provisions arose only where the transporter qualified as a Goods Transport Agency and issued a consignment note. On the facts, the transporters had not issued consignment notes, and the transportation was treated as simple transport of sugarcane rather than GTA service. The Tribunal followed the earlier view that in such circumstances the mill cannot be fastened with service tax liability as service recipient under the reverse charge scheme.

Conclusion: The respondent was not liable as recipient of GTA services and the service tax demand could not be sustained.

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