The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no service tax on transportation of passengers by ropeway is applicable.
The bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) has observed that the appellant has rendered the service of transportation of passengers by Rope Way, which has been specifically exempted from payment of service tax. The activities undertaken by the Appellant by way of transportation of passengers by ropeway was not taxable under any of the category under the positive list and was exempted under Serial No. 23(c) of Notification No.25/2012 ST dated 20.06.2012, under the negative list regime.
Background
The appellant/assessee is registered under Service Tax for providing various categories of services such as Maintenance or Repair Services, Transport of Goods by Road, Erection, Commissioning and Installation Services, Works Contract Service, Survey and Map Making Service, Design Service, Commercial & Industrial Construction Service.
The Appellant was audited for the FY 2008-12, in which certain Audit Objections were raised by the Audit group. Pursuant to the objection, a Show Cause Notice was issued by the Commissioner of Service Tax.
The demands of Service Tax of Rs.47,82,326 and Rs.12,61,083 on the operation and maintenance & repair of the Ropeway from Deorali Bazar to Secretariat (Tashiling), at Gangtok provided to the Government of Sikkim and the demand of Service Tax of Rs 12,98,761 and Rs.16,84,673 confirmed on the operation and maintenance of the Ropeway at Trikut Hill, Deoghar, provided to the Government of Jharkhand, the appellant submits that as per the agreement, they have operated the Aerial Ropeway by charging value of tickets from the riders of the ropeway.
The appellant paid yearly license fee/royalty at specific rate to the Sikkim/Jharkhand Government. Rest of the money earned is appropriated by them for operation and maintenance of the said Ropeway.
The Appellant submitted that they were given a licence to operate and maintain ropeway by the Government of Sikkim and Jharkhand against a license fee. The service provider was the Government of Sikkim and Jharkhand for providing the right to operate and maintain the ropeway for which a licence fee was being paid to the said governments. They submit that the activities undertaken by them are transportation of passengers by ropeway which is not a taxable service; the same was not taxable under any of the category under the positive list and was exempted under Serial No. 23(c) of Notification No.25/2012 ST dated 20.06.2012, under the negative list regime.
The appellant contended that the exemption was removed vide Notification No. 9/2016- ST dated 01.03.2016 with effect from 01.04.2016 and prior to such date, there was no service tax liability.
Conclusion
The tribunal while allowing the appeal held that the appellant was awarded the right to operate and maintain the ropeway for which a license fee was paid to the respective state governments. A perusal of the agreements executed by the appellant with the respective state governments clearly reveal that the appellant operated the Aerial Ropeway by charging value of tickets from the riders of the ropeway. They paid yearly license fee at specific rate to the respective governments of Sikkim and Jharkhand. Rest of the money earned is appropriated by them for operation and maintenance of the Ropeway.
FAQs
What is the rate of Service Tax On Transportation Of Passengers?
Case Details
Case Title: M/s. Damodar Ropeways & Infra Limited Versus Commissioner of Service Tax
Case No.: Service Tax Appeal No. 75999 of 2014
Date: 24.09.2024
Counsel For Appellant: Ajay Sanwaria
Counsel For Respondent: R.K. Agarwal
