Service tax on Transportation of Material

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CA Atul (Querist)
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15 April 2009 Can any one suggest me that according to "Declaration under notification No 32/2004-Service Tax" transport of goods by road service under the provisions of the Cenvat Credit Rules, 2004 during the period 01/04/2005 to 31/03/2006.

Now my Question is that it is neccesary to Deposite Service tax for the above services, when we receive material from supplier we have to deposite Service tax for the same with form no. ST3 also we are engaged in Builders & Developers Group so plz slove my question.

Dayal

Dayal (Expert)
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18 April 2009 GTA services has no relevance to the nature of business. It states that who so ever is paying freight for the transportaion of goods and falls under any of the said categories is liable to pay service tax.
As per rule 2(1)(d)(v) of Service Tax Rules, Consignor or consignee who is paying freight will be liable to pay service tax, if consignor or consignee is any one of the following –

any factory registered under or governed by the Factories Act, 1948 (63 of 1948)

any company established by or under the Companies Act, 1956 (1 of 1956)

any corporation established by or under any law

any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India

any co-operative society established by or under any law

any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder

any body corporate established, or a partnership firm registered, by or under any law

Regarding Not no 34, it exempts the value of taxable service ( freight) for 75% i.e service tax is payable only on 25% of the freight amount

Further this 25% is subject to conditions that the goods transport agency has not availed any Cenvat credit on inputs or services received for providing the said services of transport of goods by road.

For this purpose a declaration from the transporter is required to be aquired by you to justify that he has not availed any Cenvat credit in view of the above notification.

If you need the format do le us know.

However the said notification has been rescinded by Not. No 2/2006. For all purposes now refer to not no 1/2006 which provides for 75% abatement to GTA, irrespective of any conditions.

Once registration is sought under GTA then necessarily the returns have to be filed under ST3 (New format)