Goods Transport by Road - ST is on total transport amount or only 25% of the amount - clarify

This query is : Resolved

Ganesh (Querist)
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07 August 2007 Please clarify the following:

1) Under Goods Transport by Road Service, Service Tax is payable on total transport amount or only 25% of the amount.

Shyam Lal Naik

Shyam Lal Naik (Expert)
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08 August 2007 25% if the following conditions are satisfied.

1) The GTA does not take Cenvat credit of inputs and capital goods and

2) The GTA has not taken abetment for goods sold in the course of provision of service.

Otherwise - 100%

Raj

Raj (Expert)
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10 August 2007 Yes its right that GTA should not take cenvate credit in any manner along with this it should pay through cash.

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Ganesh

Ganesh (Querist)
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10 August 2007 But here how a transport operator should take Cenvat credit input and capital goods, he was exclusively transporter, who transport a particular item/product, in any manner, he was not related to the item/product, how should he take credit of cenvat/capital goods. Somebody sell the goods, somebody buys the goods, he was just a take the goods from one place to another, for that he charges. Here the transporter take the consignment as per instructions of the buyer/seller, and acts accordingly. He was not any way concern the goods, what he is transporting. Then, how credit will take by him? how the cenvat and capital goods was relating to him?

CA Prasanna Krishnan V

CA Prasanna Krishnan V (Expert)
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11 August 2007 Dear Sir,

A Goods Transporter may buy Truck the price of which will include CENVAT Duty therein.

He may appoint oursourced security services to his truck yard. Such security may charge Service Tax.

For regular/specific need truck drivers and cleaners he may use manpower supply agency services of others. Such MSA may charge service tax.

In those cases, GT should not take CENVAT credit.

Instead going through these aspects, the substance may be considered - GTA cannot take CENVAT credit at all. That is it.

Ganesh

Ganesh (Querist)
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12 August 2007 Here the truck was purchased 4 years back.
Shall we avail Cenvat Credit now, if avail, in which form shall it utilize.

So, Mr.Prasanna Krishnan,C.A., Service Providers registered under "GOODS TRANSPORT AGENCY/GOODS TRANSPORT BY ROAD" service will pay only 25% on the bill amount, as per your opinion. Yes/No?

Shyam Lal Naik

Shyam Lal Naik (Expert)
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17 August 2007 Tax on GTA was not applicable 4 years back. Cenvat credit not available.