Reverse charge liability for GTA services bars demand on the provider when tax was already paid by the recipient.

Service tax on GTA services was considered unsustainable against the service provider where the recipient had discharged tax under reverse charge for a substantial part of the receipts. On the evidence of the books, income-tax return and the recipient's letter, the taxable value had already been identified and the burden could not be shifted back to the provider. The Tribunal also treated the appellant's understanding that the recipient was liable for the tax as bona fide, so the conditions for extended limitation were not met because suppression or wilful misstatement with intent to evade were absent. Interest and consequential penalties also fell with the demand.

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Issues: Whether service tax demand, interest and penalties could be sustained on the appellant in respect of GTA services when the recipient had discharged tax under reverse charge for a substantial part of the receipts, and whether the extended period could be invoked in the facts of the case.

Analysis: The appellant's books and ITR showed freight receipts from the same recipient, while the recipient's letter and the material on record indicated discharge of service tax under reverse charge on the taxable value already identified. The balance considered by the authorities below was not shown, on the evidence accepted by the Tribunal, to justify shifting the tax burden to the service provider when the service recipient was the person liable under the reverse charge arrangement. The Tribunal also held that the appellant's belief that tax on the entire GTA service was payable by the recipient was bona fide, and in such circumstances the ingredients required for invoking the extended period, namely suppression or wilful misstatement with intent to evade, were absent.

Conclusion: The demand of service tax, interest and consequential penalties on the appellant was not sustainable. The appeal succeeded.

Final Conclusion: The impugned order was set aside and the appellant obtained full relief.

Ratio Decidendi: Where the recipient is liable under reverse charge and the assessee acts under a bona fide belief without suppression or wilful misstatement, tax cannot be demanded from the service provider and the extended period cannot be invoked.

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