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Service tax on gta in case of company

Sachin j Vatsal (CA, CS, DISA) (67 Points)

01 December 2011

Dear All,

Our private limited company is paying freight Rs. 20500 to a tractor driver who is earning his livelihood by operating this Tractor. This driver is also not registered as GTA and also not issue any consignment note.

Further, we debit above freight paid in our P/L Account.

So, whether the company is liable to pay service tax on the above freight paid being receipient.

I hope facts are clear for discussion.

Thanks in advance for discussing the Query.

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7 Replies

Bhavin Bhadra (Job) (174 Points)
Replied 01 December 2011

Yes, In case of GTA who pays the frieht is laible to pay Service tax on it..

And there is 75% exemption in it. means you need to pay 10.3*25% = 2.575% on frieght..

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valji (Accounts manager-MBA) (2150 Points)
Replied 01 December 2011

agree with bhavin

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Sachin j Vatsal (CA, CS, DISA) (67 Points)
Replied 01 December 2011

Dear Professional Collages thank you for discussing the query.

But my point of discussion is the applicablity of Service Tax in case of indivisual earning livelihood from operating tractors etc. Actually, these are not covered under perview of GTA i.e. they are operators not GTA.

(Guest)

Finance Minister Shri P. Chidambaram, in his Budget Speech on 8-7-2004 (para 149 of speech), had stated as follows, ‘58 services have been brought under the net so far. I propose to add some more this year. These are business exhibition services, airport services, services provided by transport booking agents, transport of goods by air, survey and exploration services, opinion poll services, - - - - -. I may clarify that there is no intention to levy service tax on truck owners or truck operators’.
Thus, intention of Government is to tax only services provided by transport booking agents. This aspect should be kept in mind while interpreting various provisions in the Act and Rules.
In CCE v. Kanaka Durra Agro Oil Products P Ltd. 2009-TIOL-1123 = 34 VST 214 (CESTAT), it has been confirmed that there is no liability to pay service tax on the recipient of the service in cases of transportation undertaken by the individual truck operators/lorry owners and not by Goods Transport Agencies – same view in Lakshminarayana Mining Co. v. CST (2010) 24 STT 61 = 34 VST 220 (CESTAT) * Shanti Fortune v. CCE (2010) 24 STT 464 (CESTAT SMB) * Bellary Iron v. CCE (2010) 24 STT 557 = 35 VST 107 (CESTAT) * KMB Granites v. CCE (2010) 25 STT 141 (CESTAT SMB) * Wood Bridge Tea factory v. CCE (2010) 25 STT 263 (CESTAT SMB) * MSPL Ltd. v. CCE (2010) 27 STT 400 = 46 VST 132 (CESTAT) * Salem Coop Sugar Mills v. CCE (2010) 25 STT 320 (CESTAT) * Ultra Tech Cement v. CCE (2010) 29 STT 114 (CESTAT).

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 11 July 2012

Yes it is useful....., but post 01-07-2012 what is taxable is any activity carried on for transportation of goods by road, the earlier provision of the service being provided by a GTA is now made general. Notification no. 25/2012, 26/2012 dtd. 20-06-2012 provides that services in relation to transportation of goods is taxable. Now there is no such specific clause which says that the service has to be provided by a GTA only. Kindly put your view in respect to the amended law which is effective from 01-07-2012.

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(Guest)

Mr.Ajit........

If u have doubt u can send u r query by e-mail to dateyvs @ yahoo.com

query will be answered as fast as possible........

All the Best........

(Guest)

Mr.Ajit.... New Service Tax based on -ve list

According to section 66D following service is exempt “(p) Services by way of transportation of goods- (i) by road except the services of – (A) a goods transport agency; or (B) a courier agency” And according to section 65B: “(26) goods transport agency means any person who provides services in relation to transportation of goods by road and issues consignment note, by whatever name called.” So service tax is applicable when service is provided by a person covered under the above definition of GTA and not applicable to individual truck owners.

Regards