Can Service Tax on GTA Services Be Imposed Without Proper Verification?

The case revolved around the Goods Transport Agency (GTA) service and the imposition of service tax on it. The appellant, Grand Polycoats Co Pvt Limited, contended that the service tax for the GTA service they availed was already settled by the service provider, the GTA.

Shri Mrugesh G. Pandya, representing the appellant, highlighted that this was the second time the matter was being presented before the Tribunal. In the initial round, the Tribunal had directed the Adjudicating Authority to verify certificates from transporters about the payment of service tax.

The appellant had provided all necessary documents to the Adjudicating Authority and Commissioner (Appeals). However, the Commissioner (Appeals) claimed that no such documents were presented.

The appellant's stance was strengthened by Chartered Accountant certificates, which indicated that the transporters had indeed paid the service tax.

The Tribunal, after examining the documents and arguments presented, observed that while it seemed the transporters had discharged the service tax, there was no concrete evidence of the tax being paid to the government exchequer.

The Tribunal concluded that the demand for service tax from the appellant was not sustainable based on the current evidence. However, they recommended further verification from the jurisdictional officer of the transporters to confirm the payment of service tax. The case was remanded back to the Adjudicating Authority to make a decision after this verification.

In essence, the Tribunal emphasized the importance of thorough verification and the need to ensure that taxes are not unjustly imposed on parties who have already fulfilled their tax obligations. For you, as a tax professional, this case underscores the significance of maintaining and presenting clear documentary evidence to avoid potential tax liabilities.

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CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH : AHMEDABAD REGIONAL BENCH - COURT NO. 3 SERVICE TAX Appeal No. 14159 of 2013-SM [Arising out of Order-in-Original/Appeal No VAD-EXCUS-001-APP-493-13-14 dated 15.11.2013 passed by Commissioner of Central Excise, Customs and Service Tax- VADODARA-I] Grand Polycoats Co Pvt Limited .... Appellant Padra-jambusar Road, Padra, VADODARA, GUJARAT-391440 VERSUS Commissioner of Central Excise & ST, Vadodara .... Respondent 1st Floor, Central Excise Building, Race Course Circle, Vadodara, Gujarat-390007 APPEARANCE : Shri Mrugesh G. Pandya, Advocate for the Appellant Shri Ajay Kumar Samota, Superintendent (AR) for the Revenue. CORAM: HON’BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) DATE OF HEARING : 28.07.2023 DATE OF DECISION: 03.08.2023 FINAL ORDER NO. 11652/2023 RAMESH NAIR : The issue involved in the present case is whether the appellant is liable to pay service tax on Goods Transport Agency service when they claimed that service tax on the same service was paid by the service provider i.e. GTA. 2. Shri Mrugesh G. Pandya, learned Counsel appearing on behalf of the appellant, at the outset submits that this is second round of litigation before this Tribunal. In the first round, Tribunal had remanded the matter with directions to the Adjudicating Authority to verify the certificates obtained from the transporters regarding payment of service tax by transporters. He submits that all the documents were produced before the Adjudicating Authority as well as Commissioner (Appeals) however despite this fact, learned Commissioner (Appeals) stated that no documents were submitted.It is his submission that as per Chartered Accountant certificates, it is clearthat service tax was paid by the transporters, therefore the demand is notsustainable. 3. Shri Ajay Kumar Samota, learned Superintendent (AR) reiterates the findings of the impugned order. 4. On careful consideration of the submissions made by both the sides and perusal of record, I find that this is a second round of appeal before this Tribunal. On the earlier round, the Tribunal vide order dated 26.12.2011 remanded the matter by giving following observations:- "3. On careful consideration of the submissions made by both the sides, we find that the issue involved in this case is regarding liability to pay service tax on the Goods Transport Agency services received by the Appellant. Learned counsel brings to our notice the invoices issued by the transport agencies and draws our attention to the column that transport agencies have clearly indicated in the invoices that service tax liability has been discharged by them. It is his submission that they have paid the amount of service tax liability to the transporters and the same amount cannot be recovered from them. He draws our attention to the annexure "H" attached to the appeal memorandum and submits that all the transporters have given certificates, which indicates that the amount paid by the Appellant as service tax has been deposited. At the same time, he fairly agrees that these certificates were not produced before the adjudicating authority in order to come to a proper conclusion.

We find that the adjudication authority needs to be given a chance to consider these certificates which indicate that the service tax liability on the service received by the Appellant for GTA services have been discharged by the someone. As the certificates are produced for the first time before us, in the interest of justice, we deem fit to set-aside the impugned order and remit the matter back to the adjudicating authority."

As per the above observations of the Tribunal it is clear that appellant was suppose to submit documents showing discharging payment of service tax by the transporter. From the appeal memo before the learned Commissioner (Appeals) it was pointed out by the learned Counsel that documents such as Chartered Accountant certificate, bill of transporters were produced before Commissioner (Appeals) however he has ignored the same and stated that no documents were produced. 5. From the perusal of the said documents, I am of prima-facie, view that service tax appears to have been paid by the transporter. However, at the same time no evidence of payment of service tax by the transporter to the government exchequer was produced. On the basis of documents produced by the appellant it appears that service provider i.e. transporters have discharged the service tax. On this basis, demand of service tax, prima- facie, not sustainable against the appellant. However, on the basis of details submitted before me, the Adjudicating Authority as well as the Commissioner (Appeals) can verify the fact of payment of service tax from the jurisdictional officer of transporter. Accordingly, I set-aside the impugned order and remand the matter to the Adjudicating Authority to decide the matter only after confirmation from the jurisdictional officer of the transporters that the service tax for the service received by the appellant has been paid by the transporters. 6. Appeal is allowed by way of remand to the Adjudicating Authority. (Pronounced in the open court on 03.08.2023) (Ramesh Nair) Member (Judicial)