The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the transportation of the goods and the activity of unloading and loading are clearly incidental and hence classifiable under Goods Transport Agency Service (GTA).
The bench of Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) has observed that the main activity which the appellant performed was of transportation of goods which is classifiable under the GTA as defined under Section 65B(26) and the activity of loading and unloading the goods is only ancillary.
The appellant/assessee, M/s. Kandarp Tradelink and Service Private Limited having service tax registration are engaged in rendering taxable services of clearing and forwarding agent, storage and warehousing services, cargo handling services, goods transport agency service etc.
During the course of audit of the appellant it was noticed that the appellant have wrongly classified the services of cargo handling as Goods Transport Agency Services. The appellant have provided the services to M/s. Fin Tech Corporation Pvt. Ltd. for supply of goods at designated places and residence of the customers as per the instruction given by the service recipient i.e. FTCPL and were receiving the amount from FTCPL.
They were raising invoices to FTCPL on monthly basis for the said services and no service tax was being charged/paid by the appellant on the said services by treating the services being rendered by them as covered under negative list of services under Section 66D(p)(i) of the Finance Act, 1994.
It appeared that the appellant had not paid service tax amounting to Rs.24,41,354/- during the period of March 2013 to March 2016. The show cause notice was issued to the appellant for demand of service tax of Rs.24,41,354/- along with applicable interest and penalty under Section 78, which was confirmed.
The appeal filed before Commissioner (Appeals), Jaipur, has been rejected by the order. The appellant has filed the appeal.
The tribunal held that while the activities such as packing, loading, unloading and unpacking may take substantial time and may even take longer than the actual transportation, the main purpose of the contract is to transport the goods from the old to the new residence which is the essential character of the service and packing, loading, unloading and unpacking are mere incidental activities to the main function of transportation.
Case Details
Case Title: M/s. Kandarp Tradelink and Service Private Limited Versus Commissioner of CGST & Central Excise- Jaipur I
Case No.: Service Tax Appeal No. 50848 of 2019 [DB]
Date: 18.03.2025
Counsel For Appellant: Shradha Agarwal
Counsel For Respondent: Manoj Kumar
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