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Service tax liability over truck owner

vandana agarwal (CHARTERED ACCOUNTANT) (116 Points)

18 December 2016

I HAVE A QUERY FOR GOODS TRANSPORT AGENCY SERVICE TAX APPLICABILITY. IF A PVT LTD COMPANY OWNS 9 NOS OF TRUCK REGISTERED IN THE NAME OF HIS PVT LTD COMPANY AND TRANSPORT GOODS FOR ANOTHER PVT LTD COMPANY. WHAT ARE THE SERVICE TAX IMPLICATION. I READ OWNER OF TRUCK BELOW 10 NOS ARE EXEMPTED FROM SERVICE TAX IMPLICATIONS.PLEASE SOLVE MY QUERY.TELL ME ABOUT YOUR CHARGES FOR MY QUERY.

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7 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (176853 Points)
Replied 18 December 2016

The main confusion is inter-mixing of TDS on Transporters and Service tax.

Service tax exemption:

As per mega exemption notification 25/2012-ST, there is exemption for low value consignment from levy of service tax:

where gross amount charged for the transportation of goods on a consignment transported in a single goods carriage does not exceed Rs.1500; OR
Where the gross amount charged for transportation of all such goods for a single consignee in the goods carriage is up to Rs. 750/-

Now read section 194 C of TDS:

The provisions of section 194C of the Act expressly provide the relaxation under sub-section (6 ) of section 194C of the Act from non-deduction of tax shall only be applicable to the payment in the nature of transport charges (whether paid by a person engaged in the business of transport or otherwise) made to an contractor who is engaged in the business of transport i.e. plying, hiring or leasing goods carriage and who is eligible to compute income as per the provisions of section 44AE of the Act (i.e a person who is not owning more than 10 goods carriage at any time during the previous year) and who has also furnished a declaration to this effect along with his PAN.This amendment is with effect from 1st June, 2015.

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vandana agarwal (CHARTERED ACCOUNTANT) (116 Points)
Replied 18 December 2016

Case 1:- It means If a Pvt Ltd Company Owns Less Than 10 nos of Truck and is doing Transport of goods from company owned truck it is exempted from service tax liability ???

Case 2: A Pvt Ltd Company Doesn't own Trucks and hire truck from other owner then there is non deduction of Tds From Truck Owner but What About Service Tax implications between A Pvt Ltd Company And Truck Owner.

Please Reply

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (176853 Points)
Replied 18 December 2016

1. Yes, unless its charged from customer.

2. Service receiver is liable for 100% ST under RCM.

vandana agarwal (CHARTERED ACCOUNTANT) (116 Points)
Replied 18 December 2016

sir,may i call you. Please give me your mobile no / whats app number

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (176853 Points)
Replied 18 December 2016

As per notification No. 30/2012 dated 20.06.2012, central government has notified services for whom entire service tax is payable by service receiver.

Good Transport agency’s Services: Services provided or agreed to be provided by an Goods Transport Agency in respect of transport of goods by road, where the person liable to pay freight is :-

Any Factory
Any Society
Any Co-operative society
Any dealer of excisable goods
Any body Corporate
Any Partnership firm

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vandana agarwal (CHARTERED ACCOUNTANT) (116 Points)
Replied 18 December 2016

ok sir no issue , let me clarify what i have understood. I owned a Pvt Ltd Company I have 9 nos of Truck, My Pvt Ltd Company is carrying goods by owned trucks for another Pvt Ltd Company. And My company should not get registered under Service Tax,There Is no service Tax implications on my company and there will be no deduction of TDS from my Payment.

Only service Tax Implication will be on Service Reciever Company On RCM basis.

Please Reply

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (176853 Points)
Replied 18 December 2016

There are some more parameters required to be clarified before concluding:

Do you own a transport company, Or you deliver your own goods? Do you issue consignment note?

Do you charge freight over the goods supplied from your customer?

From the available data let me clarify as:

If you are corporate, running GTA services, you are required to register under service tax, whenever crossed threshold limit. The service tax liability of GTA service will be Fully over Service receiver.

Because you are not eligible for section 44AE, TDS will be deducted from your payment. (The exemption is available for small transporers who are eligible under sec 44AE of IT act, non-corporate individual, huf & firm)