Mega exemption notification no 25/2012
This query is : Resolved
21 February 2015
We are a CHA and also provide GTA services. For providing the service of transportation of goods to our clients, we hire trucks from other GTAs. Now as per point no 22 of the mega exemtion notification, services of hiring of trucks ((a means of transport) provided to a GTA are exemot from service tax.
We however do not charge our clients separately for transportaton but include the same in the "Attendance and agency charges". It is very clearly stated in our contract with the client that we would charge them on a turnkey basis and agency charge would included transportaion.
Now the department is of the view that since we have not charged them separately for transportation, we have not actually provided any transportation service, and that in order to enjoy benefit of the said exemtion, we should have actually provided transportation service. As a result of this, they state that we cannot enjoy the benefit of the exemption and hence we are liable to pay service tax under the reverse charge mechanism.
Query 1: Is their stand correct?
Query 2: Cant we prove that we have in deed provided transporation service by produing the copy of our contract with the client which clearly states that agency charges include transporation?
Query 3: Is there a case law available that can be presented in our defense?
We however do not charge our clients separately for transportaton but include the same in the "Attendance and agency charges". It is very clearly stated in our contract with the client that we would charge them on a turnkey basis and agency charge would included transportaion.
Now the department is of the view that since we have not charged them separately for transportation, we have not actually provided any transportation service, and that in order to enjoy benefit of the said exemtion, we should have actually provided transportation service. As a result of this, they state that we cannot enjoy the benefit of the exemption and hence we are liable to pay service tax under the reverse charge mechanism.
Query 1: Is their stand correct?
Query 2: Cant we prove that we have in deed provided transporation service by produing the copy of our contract with the client which clearly states that agency charges include transporation?
Query 3: Is there a case law available that can be presented in our defense?
21 February 2015
Does attendance and agency charges include other charges other than transportation charges ???
21 February 2015
yes its included charges for attendance and agency as well as transportation. ST has also been collected and paid on the entire amount.
21 February 2015
1. Your stand is not correct. Goods Transport Agency means any commercial concern which provides service in relation to transport of goods by road and issues consignment note, by whatever name called.
2.In view of the above GTA definition you are not a GTA hence you can't claim exemption.
2.In view of the above GTA definition you are not a GTA hence you can't claim exemption.
21 February 2015
But we are a GTA we own our own trucks as well as hire trucks from other gta to provide transporation services to our clients that are necessary for us to provide our agency services. we do issue consignment notes execept in case of certain clients to whom we raise charges on a turnkey basis and recover transportation cost by including the same in the "attendance and agency charges"
21 February 2015
In instant case no consignment note issued hence the dept view stands right.
21 February 2015
Agreed with seetharaman
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