2026-VIL-1205-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Clearing and Forwarding Agent Service combined with Goods Transport Agency Service - whether both services constitute a single composite service liable to service tax or are separate and distinct services - The appellants, who were clearing and forwarding agents, entered into agreements with their principals to provide both clearing and forwarding agent services and goods transport agency services. The appellants paid service tax on amounts received for C & F agent services but not on amounts received for goods transport agency services - Dept took the position that transportation of goods is an integral part of C & F agent service and therefore the entire amount should be treated as consideration for C & F agent service attracting service tax – HELD - Although the agreement is common, it explicitly provided special rates and remuneration for C & F agent services and goods transportation services, which proves that they are not single bundled services. The transportation activity is classifiable as goods transport agency service because the appellant issued serial numbered goods receipts or consignment notes for these activities. Further, as per Rule 2(1)(d) of the Service Tax Rules, 1994, the liability to pay service tax on GTA services rests with the service recipients being bodies corporate under the reverse charge mechanism and not on the appellant - The earlier decisions of Tribunal in identical issues consistently held that amounts collected for providing GTA services cannot be included in amounts received for C & F agency services treating the two services as a single composite service even if both services were provided as per the same agreement. Consequently, the impugned order is set aside and the appeal is allowed
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