Road freight contracts taxed under GTA cannot be reclassified as tangible goods service; threshold rent receipts remain exempt.

Transportation of petroleum products under a freight-based road carriage contract, where service tax was already discharged under the Goods Transport Agency route, was not liable to be reclassified as supply of tangible goods service; the demand on that footing was therefore unsustainable. Once that demand was deleted, the receipts shown as lorry stand parking rent and building rent remained within the threshold exemption under Notification No. 33/2012-ST, so service tax under renting of immovable property service was also not payable. The appellate order was accordingly set aside and the assessee obtained full relief.

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Issues: (i) Whether transportation of petroleum products by road for HPCL could be taxed as supply of tangible goods service; (ii) Whether the receipts under renting of immovable property service were liable to service tax in view of the threshold exemption under Notification No. 33/2012-ST.

Issue (i): Whether transportation of petroleum products by road for HPCL could be taxed as supply of tangible goods service.

Analysis: The transportation arrangement was for carriage of petroleum products by road under a freight-based contract, with service tax discharged by HPCL under the goods transport agency regime. The same activity had already been treated as GTA service and was not a case of providing tangible goods for use.

Conclusion: The demand under supply of tangible goods service was unsustainable and was set aside, in favour of the assessee.

Issue (ii): Whether the receipts under renting of immovable property service were liable to service tax in view of the threshold exemption under Notification No. 33/2012-ST.

Analysis: Once the demand under supply of tangible goods service was deleted, the receipts under the renting head remained within the applicable threshold limit for the relevant year. The amounts shown under lorry stand parking rent and building rent did not cross the exemption limit prescribed by Notification No. 33/2012-ST.

Conclusion: The demand under renting of immovable property service was not sustainable and was set aside, in favour of the assessee.

Final Conclusion: The impugned appellate order was set aside and the appeal was allowed in full with consequential relief.

Ratio Decidendi: A transport contract for carriage of goods by road, where tax is discharged under the GTA route, cannot be reclassified and taxed again as supply of tangible goods service, and receipts below the prescribed exemption threshold do not attract service tax under renting of immovable property service.

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