Practical Accounts And Taxation
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The assessee was engaged in a contract to transport the goods and not to provide cargo handling services. Its main conflict was that the services rendered by it were of transportation only and not cargo handling services.
The Judging Authority held that the services provided by the assessee would fall under the category of 'cargo handling service'. For which the Commissioner (Appeals) upheld the disputed order and the Assessee filed an appeal before CESTAT.
CESTAT observed that mere transportation of cargo is excluded from that definition as even transportation of goods will surely include some manner of loading and unloading of the goods.
As per the provisions of sub-section (23) of section 65, 'Cargo Handling Service' means loading, unloading, packing or unpacking of cargo and includes cargo handling services provided for freight in special containers or for non-containerized freight. Even services provided by a container freight terminal or any other freight terminal, for all modes of transport and cargo handling service incidental to freight, but does not include handling of export cargo or passenger baggage or mere transportation of goods.
Hence, the services of transportation of goods by air would not be taxable under 'cargo handling service’.
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