Gujarat HC: Cargo delivering from Consignor’s to Consignee’s place is not cargo handling charges but transportation of goods

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Classification of services – Section 65(50b), read with section 65(23) of the Finance Act, 1994 – Goods Transport Agency’s Services – Assessee was a body whose members were, inter alia, goods transport operators and engaged in business of transportation of goods supplied by customers – Respondents issued impugned show-cause notices to assessee demanding service tax from assessee under category of ‘Cargo Handling Services’ – Whether mere transportation of goods is not covered in category of cargo handling service and therefore, is not liable to service tax under said heading – Held, yes

Whether where main function of assessee was to deliver cargo from place of consignor in Gujarat to place of consignee in South India where consignor loaded goods into container and consignee unloaded same, it would in effect be transportation of goods and not cargo handling service as assessee did not provide service of packing together with transportation – Held, yes

Whether even if any ancillary service of loading or unloading was being provided with help of other service providers, transaction would not fall within ambit of cargo handling service – Held, yes – Whether therefore, impugned show-cause notices being contrary to legal provisions were to be quashed and set aside – Held, yes

Citation: [2018] 89 taxmann.com 325 (Gujarat)