CESTAT New Delhi Holds Goods Transport by Road Without Consignment Note Not Taxable GTA Service

The New Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), on 5 June set aside a service tax demand against Best Road Carriers after holding that mere transportation of goods by road, without issuing a consignment note or providing ancillary services, does not amount to a taxable Goods Transport Agency (GTA) service.

Judicial Member Dr. Rachna Gupta and Technical Member Hemambika R. Priya held:

“Since under GTA it is only such of these services which are in relation to transport of goods by road which are taxable and not the actual transport of goods by road itself. And that appellant has not rendered any service in relation to transport of goods by road like loading / unloading nor even for reimbursing for damage and not issuing the consignment note except mere transport of Goods by road…”

The dispute arose after the Income Tax Department shared information showing that Best Road Carriers received payments of around Rs. 16.90 crore during FY 2014–15. Based on TDS data, the service tax department treated the receipts as consideration for taxable services and raised a demand of over Rs. 2.08 crore, along with interest and penalties.

Best Road Carriers argued that it only transported goods by road as a Goods Transport Operator (GTO) and did not qualify as a Goods Transport Agency. It submitted that it only charged freight, did not issue consignment notes, did not register under the Carriage by Road Act, and did not undertake ancillary services such as loading, unloading, or warehousing.

The Tribunal held that a service provider qualifies as a GTA only when it provides transportation services and issues a consignment note, which forms an essential statutory requirement. It further held that Best Road Carriers only transported goods from one place to another and that other entities handled loading and unloading. It also noted that the department failed to produce any evidence showing issuance of consignment notes or provision of ancillary services. The Bench reiterated:

“...The activity is held to be mere transport of goods by road as is covered under negative list, as already mentioned above. It being the activity not subject to tax, the adjudicating authority is held to have wrongly confirmed the demand…”

Referring to Section 66D(p) of the Finance Act, 1994, the Tribunal held that mere transportation of goods by road falls within the negative list and does not attract service tax as GTA unless statutory conditions are met.

Accordingly, the CESTAT set aside the entire demand, holding that Best Road Carriers could not be treated as a GTA in the absence of consignment notes or ancillary transportation services.

For Appellant: Shri Kashish Kumar Gupta, Advocate

For Respondent: S.K. Meena, Authorized Representative