GTA Service abatement

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Praveeri (Querist)
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02 April 2009 Dear Experts,

We are hiring a goods carriage to transport our despatches to our customers and we pay freight on the basis of KM ran.We transit in a single carriage for multiple customers at a time. My query is what will be the abatement amount can be claimed (1) Rs.750/- or (2) Rs.1500.00

Thanks in advance

Praveeri

K V Subba Rao

K V Subba Rao (Expert)
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02 April 2009 Take note of examples available in Page 2.426 of 8th edition of Bharat's Treatise on Service Tax by Sunil B. Gabhawalla. Following is the gist:

(1) X transports material to Y & Z (Freight Rs 600 and Rs 800 respectively)--Exempted since gross value of consignments is below Rs 1500

(2) X transports material to A, B & C (Freight Rs 700, Rs 600 and Rs 500 respectively)--Exempted since value of individual consignments is below Rs 750 even though gross value of consignments is above Rs 1500

(3) X transports material to Y & Z (Freight Rs 1300 and Rs 450 respectively)--Exemption is available for the consignment to Z but not for consginment to Y

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Praveeri

Praveeri (Querist)
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02 April 2009 Thank you sir,

But what will be the tax liablity against Rs.800 mentioned in first two cases. Further when we receive the service the value of Individual consignments does not exceed Rs.750.00 but the gross amount exeeds Rs.1500.00 what will be the liability and status of abatement.

Pls explain in detail.

Thanks and regards,

K.Praveeri

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K V Subba Rao

K V Subba Rao (Expert)
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02 April 2009 Notification 34/2004 exempts...,"where,-

(i) the gross amount charged on consignments transported in a goods carriage does not exceed rupees one thousand five hundred; or

(ii) the gross amount charged on an individual consignment transported in a goods carriage does not exceed rupees seven hundred fifty

(Source: http://www.servicetax.gov.in/servtax_notfns_idx.htm)

Use of the word "or" {between (i) and (ii)} in the text of notification implies that exemption is available if one of the two or either of the two conditions is fulfilled. (Note: Notification did not make it compulsory that both the conditions should be fulfilled)

IMPORTANT NOTE: Earlier in the second example, I typed figures wrongly. Correct figures should be Rs 700, Rs 600 & Rs 500)

So I am modifying my previous reply. After reading modified reply, if you have doubt, please revert

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