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please explain the position when a person who is GTA (Proprietorship Firm) is charged Service Tax in the bill or consignment note and recover the same from the service recipient who is a Private Limited Company. Since the Private Limited Company has already been paid the Service Tax to the GTA, whether he is still liable to pay service tax under reverse charge mechanism. Can department demand the same? If not what should be our suitable answer with citation (if any).
Our view is of that since their is no loss to the ravanue and service tax has already been paid and deposited with the department against the said service, no demand should be made from the service receipent i.e. (Pvt. Ltd. Company). If department still demand the same, here double taxation will be made for the single service.
Also advise that the following citations would be helpfull or not.
in Lilason Breweries v. CCE (2010) 24 STT 279 (CESTAT SMB), service tax was paid by transporters themselves. It was held that demand of tax again on same service is not sustainable.
in Invincible Security Services v. CCE (2009) 19 STT 103 (CESTAT SMB), assessee was providing security services to BSNL. BSNL got registered itself, paid the service tax and filed the returns. It was held that since department has accepted the return and service tax, it cannot be said that liability cannot be discharged by service receiver.
In Sanjivani SSK Ltd. v. CCE (2009) 241 ELT 431 (CESTAT), excise duty on molasses was paid by manufacturer (though it was payable by procurer). It was held that the duty cannot be demanded from the procurer as such liability would be against principle of double taxation of same goods. It was also held that the procurer can avail Cenvat credit of duty paid by manufacturer on molasses, as what matters is whether duty was ‘paid’ on the inputs and not whether duty was ‘payable’ thereon.
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