Supply of Tangible Goods

[Guest]

Whether Service Tax can be imposed under Supply of Tangible Goods in case where

The Aseessee procured Railway Wagons under Liberalised Wagon Investment Scheme and those Wagons are used by the Railways only for the purpose of Transportation of the Finished Goods of the Assessee. In return to that the Railways are providing 15% concession on freight to the Assessee.

Whether Service Tax can be imposed on the concession of freight treating that as the consideration under Supply of Tangible Goods.

The wagons will be used only for the purpose of the Assessee only but not for any other public

[Himansu Sekhar]

Sir,

This issue is pending in tribunal in as demand ofservice tax as wagon facilitation charge. The issue as understood is enumerated below

A. You procured the wagons and it belonged to you

B. As agreed by you, the wagons are provided to railways

C. Railways ,will provide the service

C. You have also provided a service by offering the wagons to railways.

D. Consideration is the discount.

I think service tax s leviable.

[Himansu Sekhar]

In continuation, a though discussion is needed as it is an issue in other locations.

[Guest]

Thank u sir,

"Offering the Wagons to Railways" It means that the Wagons are used only for the purpose of the Assessee and not for any others. That means for private purpose of the Assessee only.

AI Summary

Service tax on freight concession where freight discount functions as consideration for providing wagons to carrier. Whether service tax is leviable where an assessee owns wagons placed with the railways for exclusive carriage of the assessee's goods and the railways grant a freight concession; administrative position treats the assessee as providing a service by offering wagons and views the freight concession as the consideration, potentially attracting a wagon facilitation service tax, a matter pending before the tribunal.