GTA sub contract Double tax

This query is : Resolved

SAMEER (Querist)
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14 September 2009 Dear Sir

Regards

i did'nt find answer in forum discussion
I request you to solve my problem-

One of my client has entered in to an Transporting agreement with Coal mining company which reads as under

“The Ex Serviceman Transport Company xyz Coal Carriers Private Limited should procure its own Tipping Trucks as per present requirement with provision to deploy more Tipping Trucks on the sole discretion of management for Transportation of Coal from the companies various quarries/faces/Bunkers/Surface/stock/CHPs/Feeder Breakers as per directives of the Chief general manager/General manager of the area on the terms and condition mentioned hereunder and the aforesaid Ex-Serviceman Transport companies Having agreed to the terms and condition offered to them.”

The mining company is paying GTA on transport charges availing abatement of 75% and asked our client to give declaration that we shall not avail benefit of CENVAT credit in any account.

Now the case is :

My Client xyz has arranged some trucks from Ex service men and deployed them in performance of above work (Main contract).

however my client is neither paying any tax nor taking credit of any CENVAT whereas
Deapartment is asking us to pay tax as GTA on amount paid to individual truck owners who actually performed the work ?

there is clearly doble taxation on single service and coal company is not able to take credit of tax which has been asked to pay by us, as they are taking benefit of abatement.

how can we avoid paying double tax?????

Thanks and regards
CA SAMEER SINGH

Shyam Lal Naik

Shyam Lal Naik (Expert)
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14 September 2009 There is a need to understand the definition of Goods Transport Agency and the legislative intent.

GTA service is not on the truck owners, but the Goods Transport Agents. This is clear from the FM's speech while moving the Finance(No. 2) Bill, 2004.

Goods Transport Agent means any person providing service in relation to transport of goods by road and issues a consignment notes.

In the circumstances cited by you, the contractor(the ex servicemen company) is the agent. The goods are transported vide the consignment note, or any other document, raised by the contractor. The outside truck owners(sub-contractors) does not issue any consignment notes or other documents of like nature. The merely offer their trucks/vehicle on hire. As such the truck owners does not fall within the definition of GTA.

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Shyam Lal Naik

Shyam Lal Naik (Expert)
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14 September 2009 You may also refer to the following case.

C.C.E. & C., GUNTUR Versus KANAKA DURGA AGRO OIL PRODUCTS PVT. LTD

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SAMEER

SAMEER (Querist)
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14 September 2009 I GOT YOUR POINT

THANK YOU SO MUCH