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Goods Transport Operator

Service Tax (Legacy) 2279 views 1 replies

santhosh

636 Points Posted on 10 September 2009

Hi there,

i am currently involved a Statutory Audit for a ice cream Manufacturing Company for Financial Year (2008-09),since they dont have Excise Duty there are no issues with that.

But they engage a lot of Transporters for freight and Transport of ice creams (FG) as well as Freezers to Dealers & Distributors. Most of these operators are individuals who dont even raise bills for their services. The company only prepares a trip sheet and get it signed from the drivers. Now my question is whether these people come under Goods Transport Operators and Should the Company Pay service tax on these services procurred. As far as i have seen the company does not pay service tax on these also it doesnt have Service tax reg.

What is the Criteria to get categorised as Goods Transport Operators?

What is the Risk involved if company Doesnt Pay Service tax on these services procurred ?

Thanks & Regards

SANTHOSH KUMAR.V

Replies (1)

CA Shilpi Jain

Indirect taxation

155 Points Posted on 10 September 2009

As per rule 4B of the service tax rules a GTA is required to raise the consignement note in which he is also required to mention as to whois liable to pay service tax.

In the current case as u say, no consignment note is avaiable.

THis is the problem faced with this category of service and we find many clients not discharging their liability on this service.

U can verifiy whether the goods are transported in goods carriage. If not then there is no liability of service tax.