No Service Tax liability as Consignment Notes not been issued, Activities can’t be covered under ‘GTA’ Services: CESTAT [Read Order]

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has No Service Tax liability as Consignment Notes have not been issued, activities can’t be covered under ‘goods transport agency’ services.

The appellant is a trust registered under the Registration Act, 1908. It was constituted on 05.01.2009 with an aim to carry out charitable objects, which amongst others included yoga education and training for achieving a disease-free and healthy India.

The appellant is also registered under section 12AA read with section 12A of the Income Tax Act, 19613. The appellant claims that in order to fulfill its objectives, it engaged itself in organizing residential as well as non-residential yoga camps to propagate yoga training and vedic knowledge for which it received donations from its members.

An enquiry was, however, conducted in connection with non- payment of service tax on such membership donations, on freight charges paid by the appellant, and on the amount by the appellant for hiring motor vehicles. Ultimately, a show cause notice dated 06.04.2014 was issued to the appellant for the period January 2009 to March 2013 proposing demand of service tax with interest and penalty under the category of ‘club or association service’, ‘goods and transport agency service’ and ‘rent-a-cab operator service’. This show cause notice is pending adjudication.

The coram headed by President Justice Dilip Gupta and Technical Member, P.V.Subba Rao has held that ‘Goods transport agency’ service has been defined in section 65(26) of the Finance Act to mean any person who provides service in relation to transport of goods by road and issues consignment notes, by whatever name called. In the present case, consignment notes have not been issued and so the activities cannot be said to be covered under ‘goods transport agency’ services.

“Thus, service tax liability could not have been fastened on the appellant under the reserve charge mechanism,” the CESTAT said.

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