No Service Tax On Individual Truck Owners Without Consignment Note: CESTAT Sets Aside ₹3.42 Lakh Service Tax Demand [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad Bench has set aside the demand of service tax of ₹3.42 lakh in favor of an individual truck owner holding that service tax under GTA services is not leviable in the absence of a consignment note.

The Tribunal held that the consignment note is an essential element for treating any person as GTA. Since the appellant was only an individual truck owner and did not issue consignment notes the demand of service tax, interest and penalties was held to be unsustainable.

The demand was made on the basis of Income Tax returns for FY 2016-17, which revealed gross receipts of ₹22.85 lakh from trucking activities.

However,on this basis the department held that the appellant was providing GTA services and issued a show cause notice for payment of service tax of ₹3.42 lakh along with penalties. The adjudicating authority sustained the demand, and this was further upheld by the Commissioner.

The appellant submitted that he was a GTA himself and owned trucks and in support of this he submitted the registration certificate of the truck. It was further submitted that individual truckers are not GTA as they do not issue consignment notes.

The appellant also challenged the proceedings on the ground of inordinate delay relying on Section 73(4B) of the Finance Act, 1994.Further,the Revenue supported the demand and held that the income earned was from taxable transport services.

Allowing the appeal the Tribunal comprising Mr. P.K. Choudhary[Judicial Member] held that GTA services can be provided without the aid of vehicles but only those who issue consignment notes are GTA.

The Tribunal also held that there were procedural irregularities due to delayed adjudication. As such, the entire demand, interest, and penalties were annulled.

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