The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no Goods Transport Agency (GTA) liability when transmission of electricity is exempted from service tax.
The bench of Ashok Jindal, (Judicial Member) and K. Anpazhakan (Technical Member) has observed that rural electrification involves services related to electricity transmission, which are exempt from service tax under GTA services. As per Notification No. 25/2012-ST, transmission and distribution of power are not taxable.
Notification No.45/2010-ST dated 20th July, 2010 has exempted all taxable services relating to transmission and distribution of electricity provided by a person to any other person that all such services are liable to service tax under the Finance Act, which were not being levied according to the practice during the impugned period.
The appellant/assessee entered into an agreement with ASEB for installation and erection of 11KVA & LT line for rural electrification under Rajib Gandhi Gramin Vidyutikaran Yojna in Assam. As per the terms of the contract, the appellant is carrying electrification in lower Assam.
The whole project is on turnkey project and to handover the project to the Assam State Electricity Board (ASEB) after completion of the project. The appellant has quoted the price on element of cost of the project showing the freight charges for transportation of materials to the project site, which is part of the project contract.
The respondent audited and during the course of scrutiny, it was observed by the Audit Team that during the period from April, 2008 to March, 2013, the appellant has received an amount of Rs.7,96,96,636/- as freight and insurance from ASEB in respect of transportation of goods brought in by them for carrying on turnkey project of rural electrification and did not pay the service tax.
Therefore, the proceedings were initiated against the appellant and demand of service tax was confirmed.
The appellant contended that it was engaged in the activities of installation and erection of electricity under Rajib Gandhi Gramin Vidyutikaran Yojna in the State of Assam. Any activity connected with the services, is exempted from payment of service tax under Notification No.45/2010- ST dated 20th July, 2010. Therefore, they are not liable to pay service tax.
The court while allowing the appeal held that the appellant has availed services under “Goods Transport Agency’s Services” in respect of the services provided by them for installation and erection of for rural electrification under Rajib Gandhi Gramin Vidyutikaran Yojna, which is exempted in terms of Notification No.45/2010-ST dated 20th July, 2010.
The court held that the whole of the demand of service tax is set aside. Consequently, the penalty imposed on the appellant is also set aside.
Case Details
Case Title: M/s Brahmaputra River Valley Trading (P) Ltd. Versus Commissioner of Central Excise & Service Tax, Guwahati
Case No.: Service Tax Appeal No.75310 of 2016
Date: 24/01/2025
Counsel For Appellant: Debraj Sahu
Counsel For Respondent: S.K.Singh
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