Case Details: Balajee Structural India Ltd. Versus Commissioner of Central Excise & Service Tax, Raipur (2025) 32 Centax 165 (Tri.-Del)
Judiciary and Counsel Details
- Dr. Rachna Gupta, Member (J) & Shri P.V. Subba Rao, Member (T)
- Shri Ankur Upadhyay, Adv., for the Appellant.
- Shri Aejaz Ahmad, Authorised Representative, for the Respondent.
Facts of the Case
The assessee was registered with the service tax department under the category of “Goods Transport Agency Service”. During the audit, it was found that the assessee transported goods for a particular party and charged them Rs. 200 per metric ton per trip. However, the assessee used the services of a sub-contractor for the purpose of paying him only Rs. 140 per metric ton per trip. Since service tax on GTA services was to be paid by the recipient of the service, the assessee paid service tax on the amount which it had paid to its sub-contractor. The audit formed an opinion that the profit of Rs. 60 (Rs. 200 – Rs. 140) earned by the assessee is chargeable to service tax as “Business Auxiliary Service” under section 65(19) and as service not under the negative list under section 65B (44) after 01.07.2012. Aggrieved by the order, the assessee preferred an appeal to the Chhattisgarh High Court.
High Court Held
The High Court held that the nature of the service can be seen from the contract between the parties (be it written or oral or formal and informal). The activity or service provided in this case was GTA, and it is undisputed that it is chargeable to service tax under reverse charge, and the service recipient has to pay the service tax. Further, the service tax is not a tax on profit or income or any amount received. What is important is to see if any service was rendered and if so, what was the consideration for the service. There is no separate activity. If that be so, it can only be called GTA service, and the recipient has to pay service tax.
List of Notifications Cited
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Notification No. 30/2012-S.T., dated 20-6-2012 [Para 4]
