Service Tax on Goods Transport Agencies

[Submitted by Mr. V.M.V. Subba Rao, B.Com., F.C.A., D.I.S.A(ICA)]

The Service tax on Goods Transport Agencies shall come into force on the first day of January, 2005.

The Service Tax shall be chargeable on 25% of the Gross Amount charged from the customer subject to that: 

• the credit of duty paid on inputs or capital goods used for providing such taxable goods shall not be taken.
• the goods transport agency has not availed the benefit under notification No.12/2003 dt.20/06/2003

The person making payment towards freight shall be liable to pay the service tax in cases where the consignor or the consignee of the goods transported is one of the following categories: 

• any factory registered under or governed by the  Factories Act,1948;
• any company established by or under the Companies Act,1956;
• any corporation established by or under any law;
• any society registered under the Societies Registration Act,1860;
• any co-operative society established by or under any law;
• any dealer of excisable goods, who is registered under the Central Excise Act,1944;
• any body corporate established, or a partnership firm registered, by or under any law;

In all other cases, the service tax has to be paid by the Goods Transport Agencies.

All the goods transport agencies are required to issue a consignment note subject to exemption laid down under section 93 of the Act,

The service tax would not be chargeable on transportation of fruits, vegetables, eggs or milk by road in a goods carriage.

The service tax is also not chargeable if the gross amount charged on all consignments transported in a goods carriage is not more than Rs.1,500/- or on an individual consignment is not more than Rs.750/-.

"Goods Transport Agency" means any commercial concern which provides service in relation to transport of goods by road and issues consignment note, by whatever name called;

The rate of service tax shall be 10.2% (including education cess).

(Refer Notifications No.32,33,34 & 35 /2004-Service-tax Dated:.December 3, 2004)

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