Reverse Charge on GTA services: separately stated transportation charges are distinct and not includible in clearing and forwarding service value.

Where agreements separately state charges for transportation and clearing-and-forwarding, and transportation satisfies GTA formalities (serial consignment notes) with tax on GTA discharged by the recipient under reverse charge, transportation remuneration constitutes GTA service and must not be included in the assessable value of clearing-and-forwarding services; aggregating such charges would result in double taxation. Applying these principles to the facts leads to setting aside the demand and allowing the appeal in favour of the assessee, with transportation classified as distinct GTA remuneration not subject to inclusion in C&F service value.

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Issues: Whether remuneration recovered for transportation of goods by a goods transport agency, separately stated under the same agreement, must be included in the assessable value of clearing and forwarding agent services for service tax levy.

Analysis: The agreements specified separate charges for clearing and forwarding services and for goods transportation. Transportation activity fulfilled requirements of GTA services including issuance of serial numbered goods receipts/consignment notes and reverse charge payment by corporate recipients as per Rule 2(1)(d)(d) of the Service Tax Rules, 1994. Prior authoritative decisions established that where distinct services are separately indicated with separate remuneration and where tax on GTA services is discharged by the recipient under reverse charge, transportation charges are not to be clubbed with clearing and forwarding agent services to avoid double taxation. Administrative instructions and CBEC guidance further support prevention of double charging where tax on transportation is payable by the recipient. Applying these legal principles and precedent to the facts - separate rates, issuance of consignment notes, and tax paid by recipients under reverse charge - leads to the conclusion that transportation remuneration is classifiable as GTA service and not includible in the value of clearing and forwarding services.

Conclusion: Transportation remuneration stated separately under the same agreement is not includible in the assessable value of clearing and forwarding agent services; the impugned demand is set aside and the appeal is allowed in favour of the assessee.

Ratio Decidendi: Where agreements separately specify charges for transportation and GTA service formalities (such as consignment notes) are complied with and tax on GTA is paid by the recipient under reverse charge, transportation charges cannot be aggregated into the value of clearing and forwarding services for service tax purposes as that would result in impermissible double taxation.

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