Individual truck owners are not liable for service tax

In this case, assessee, a manufacturer of sugar, collected raw material viz. sugarcane from farmers at various collection centres. Assessee engaged individual farmers for transportation of sugarcane from collection centres to factory and paid transportation charges. Assessee didn't pay service tax on transportation charges as recipient of service.- Department contended that individual truck-owners were goods transport agency and services provided by them were liable to service tax.


It was held that only persons issuing consignment notes are covered within 'goods transport agency'. A person who doesn't issue consignment note cannot be regarded as 'goods transport agency' and cannot be asked to issue consignment note under Rule 4B. As per Finance Minister's Speech on Budget 2004-05, there was clear intention not to levy service tax on individual truck owners except where trucks were booked by 'goods transport agency' engaged in booking cargo and issuing consignment note in normal course of business. Hence, prima facie, goods transport services by individual truck owners viz. farmers was not liable to service tax. Accordingly, stay was granted in full

Editor's Note : The legal position doesn't change even under the present law.
BAZPUR CO-OPERATIVE SUGAR FACTORY LTD. v. COMMISSIONER OF CENTRAL EXCISE, MEERUT-II[2012] 23 taxmann.com 428 (New Delhi - CESTAT)
Tags-service tax on transport,service tax on trucks onwers,service tax on transport company
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