Service tax on loading & unloading services

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 September 2012 Dear Expert
I have a query, whrere the transporter is billing us as per below:

Bill Amount= Transporation charges+Loading & Unloading charges.

Should we pay the service tax on bill amount or on only transportation charges ?

Please clarify ?

Regards

U S Sharma

U S Sharma (Expert)
Follow

28 September 2012 gross amount is liable to service tax.

CA Suresh Jain

CA Suresh Jain (Expert)
Follow

29 September 2012 With due respect to Mr. U.S. Sharma I do not agree to his view as the wording of notification 30/2012 is as under :-

"in respect of services provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road"

Meaning thereby, the RCM is applicable to the serrvice and charges in respect to trasportation of goods and for any other service provided by the GTA

Upgrade to CAclubindia Pro. Subscribe Now!

U S Sharma

U S Sharma (Expert)
Follow

29 September 2012 Goods Transport Agency service- Clarification on ancillary services and
classification.-
1. Issue: GTA provides service to a person in relation to transportation of goods by
road in a goods carriage. The service provided is a single composite service which
may include various intermediary and ancillary service such as loading/ unloading,
packing/ unpacking, transshipment, temporary warehousing. For the service provided, GTA issues a consignment note and the invoice issued by the GTA for
providing the said service includes the value of intermediary and ancillary services.
In such a case, whether the intermediary or ancillary activities are to be treated as
part of GTA service and abatement should be extended to the charge for such
intermediary or ancillary service?
Clarification: GTA provides a service in relation to transportation of goods by road
which is a single composite service. GTA also issues consignment note. The
composite service may include various intermediate and ancillary services provided
in relation to the principal service of the road transport of goods. Such intermediate
and ancillary services may include services loading/ unloading, packing/ unpacking,
transshipment, temporary warehousing etc., which are provided in the course of
transportation by road. These services are not provided as independent activities but
are the means for successful provision of the principal service, namely, the
transportation of goods by road. The contention that a single composite service
should not be broken into its components and classified as separate services is a
well-accepted principle of classification. As clarified earlier vide F.No. 334/4/2006-
TRU, dated 28.2.2006 (para 3.2 and 3.3) [2006 (4) S.T.R.. C30] and F.No.
334/1/2008-TRU, dated 29.2.2008 (para 3.2 and 3.3) [2008 (9)S.T.R. C61], a
composite service, even if it consists of more than one service, should be treated as
a single service based on the main or principal service and accordingly classified.
While taking a view, both the form and substance of the transaction are to be taken
into account. The guiding principle is to indentify the essential features of the
transaction. The method of invoicing does not alter the single composite nature of
the service and classification in such cases are based on essential character by
applying the principle of classification enumerated in section 65A. Thus, if any
ancillary/ intermediate service is provided in relation to transportation of goods, and
the charges, if any, for such services are included in the invoice issued by the GTA,
and not by any other person, such service would form part of GTA service and,
therefore, the abatement of 75% would be available on it.

http://www.servicetax.gov.in/st-profiles/tpt-road.pdf

CA Suresh Jain

CA Suresh Jain (Expert)
Follow

29 September 2012 First of all let me make it cclear the from loading and unloading ccharges I understand the loading of the goods from theconsigner's place (not at transport agency) and unloading at the consignee's place.

As per section 65 (50b) the GTA or ―goods transport agency‖ means any 5[person who] provides service in relation to transport of goods by road and issues consignment note, by whatever name called

But in notification 30/2012 the words used are not the words "in relation to transportion of goods" but " in respect of transportation of goods" and therefore, if the loading and unloading serrvice is charged separately the is not to be subjected to RCM.

Secondly, from secction 66F which provides for taxability of bundled serrvices it is clear that the services which are not naturally bundled are to be treated as a separate service. Loading and unloading as mentioned above are not natually bundeled and therefore, on this account also can not be a part of RCM.

Other service as mentioned by Mr. sharma like loading and unloading at GTA, Transhipment, enroute warehousing are the service naturally budled with transportaion of goods serrvice and therrfore, are subject to RCM even if charged separately

Message likes : 1 times

CA Suresh Jain

CA Suresh Jain (Expert)
Follow

U S Sharma

U S Sharma (Expert)
Follow

29 September 2012 if loading and unloading is not provided by the GTA holder, then no issue with service tax, but as its in relation to the goods which are subjected to avail services of GTA, i.e loading from the place + transport+ unloading at destination .........its a complete chain of GTA, some include it in freight , some mention it seperately, but without loading and unloading the GTA services can not be availed/ completed !!

Message likes : 1 times