Service Tax Goods Transport by Road

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Alkesh Trivedi

Service

71 Points Joined October 2007

We are manufacturer of Pharmaceuticals Product.

We are clearing two types of finished goods,

A. Self Manufactured Goods which manufactured in out plant.

B. Third party purchased goods which received from other manufacturer (from various state).

We dispatched both the finished goods to….

a. Super Stockiest

b. Consignment Agent

c. Branch Transfer

My query is regarding Service Tax - Goods Transport by Road.

We are falling in seven categories for paying service tax GTA.

To availing CENVAT credit of service tax (GTA) , here is condition that…

“Almost all the consignors and consignees, who are paying service tax, as per the above provisions of the Service Tax Rules have been paying service tax only on 25 % of the freight amount, as per Notification 32/2004, after ensuring that the GTA has not availed any credit on inputs and capital goods for rendering the service. Govt finally had come up with a 37B order to clarify the issue but it is not understood why it took so long .”

In our case it difficult to mention above condition in LR copy of all the transporter.

Pl Guide me that our procedure is correct or to be corrected. If required to be correct pl suggest where to be correct.

Our procedure is that…..

Self manufactured goods (for coming) :

Paying service tax on 100 % Freight amt. and availing Credit.

Self manufactured goods (for out going):

Paying service tax on 100 % Freight amt. and availing Credit in case of Branch Transfer and consignment Agent and not availing for Super Stockiest.

Third Party Purchased Goods (for incoming & Outgoing) :

Paying service tax on 25 % Freight amt. and not availing Credit.

Local authority (service tax) is taking objection that you can not accept double standard of abatement 75%.

I hope you all are guide me through your valuable knowledge.

Thanks

Rutambh

Replies (5)

Dayal

Gen. Manager - Indirect Taxation

3451 Points Joined October 2007

You can do one simple exercise Send a declaration format to all your transporters and ask them to give the same covering the period you desire. This was you shall be paying only under one option by exercising 25% provisions However the department cannot object on the stand taken by you in absence of the declartion by the transporter If you want the format do let me know I shall mail you the same

Alkesh Trivedi

Service

71 Points Joined October 2007

I am very thanks to you for quick reply.Pl send ' declaration format ' Thanks Alkesh

ajay garg

Service

74 Points Joined November 2007

Dear friend, If you go through the 37B Order No.5/1/2007-ST dated 12.03.2007, It is crystal clear that " In terms of notification No. 32/2004-ST, dated 3.12.2004 (rescinded on 1.3.2006), and No. 1/2006-ST, dated 1.3.2006, the Central Government has exempted the taxable service provided by a goods transport agency to a customer, in relation to transport of goods by road, in a goods carriage, from so much of service tax leviable thereon as is in excess of the service tax calculated on the value which is equivalent to twenty-five per cent of the gross amount charged from the customer by such goods transport agency, subject to the following conditions,- (i) the credit of duty paid on inputs or capital goods used for providing such taxable service has not been taken; (ii) the goods transport agency has not availed of the benefit under the notification No. 12/2003-ST, dated 20.6.2003. " Hence at the same time how you can eastablish that in case of branch transfer/sale through consignment agent, the transporter agency has availed the benefit under the notification no. 12/2003-ST dated 20.06.2007 but at the time of dispatch of material to Stockist, the transporter agency has not availed the benefit under the notification no. 12/2003-ST dated 20.06.2007. Hence you should maintain only singly status either pay service tax @ 25% or 100% otherwise it will creat legeal litigation. Regards Ajay Garg J.K.White Cement Works, Gotan 09929188806

CA Sanjeev Kr Jain

c a

1477 Points Joined October 2007

Dear Mr Dayal & Alkesh

pl mail me the declaration format to be obtained from transporter at CONTACT_NKJ @ YAHOO.CO.IN, VIBCONDELHI @ INDIATIMES.COM, very urgent as case is fixed on 20.1.2010

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

Originally posted by : Alkesh Trivedi
	We are manufacturer of Pharmaceuticals Product. We are clearing two types of finished goods, A. Self Manufactured Goods which manufactured in out plant. B. Third party purchased goods which received from other manufacturer (from various state). We dispatched both the finished goods to…. a. Super Stockiest b. Consignment Agent c. Branch Transfer My query is regarding Service Tax - Goods Transport by Road. We are falling in seven categories for paying service tax GTA. To availing CENVAT credit of service tax (GTA) , here is condition that… “Almost all the consignors and consignees, who are paying service tax, as per the above provisions of the Service Tax Rules have been paying service tax only on 25 % of the freight amount, as per Notification 32/2004, after ensuring that the GTA has not availed any credit on inputs and capital goods for rendering the service. Govt finally had come up with a 37B order to clarify the issue but it is not understood why it took so long .” In our case it difficult to mention above condition in LR copy of all the transporter. Pl Guide me that our procedure is correct or to be corrected. If required to be correct pl suggest where to be correct. Our procedure is that….. A. Self manufactured goods (for coming) : Paying service tax on 100 % Freight amt. and availing Credit. Self manufactured goods (for out going): Paying service tax on 100 % Freight amt. and availing Credit in case of Branch Transfer and consignment Agent and not availing for Super Stockiest. B. Third Party Purchased Goods (for incoming & Outgoing) : Paying service tax on 25 % Freight amt. and not availing Credit. Local authority (service tax) is taking objection that you can not accept double standard of abatement 75%. I hope you all are guide me through your valuable knowledge. Thanks Rutambh

1) you have to pay only 25% of GTA service tax ..........

2) you can take credit of GTA service tax paid on carrige inward without any condition

3) you can take credit of GTA when goods are sent for branch transfer, depot transfer i.e . service tax on only those GTA is not available which are sold at factory gate,

4) for declaration from transporter ......make 1-2 rubber stamps of declaration and stamp the receipts.