Goods Transport Agency

TRANSPORT OF GOOD BY ROAD

(w.e.f 01-01-2005 Nofn. No. 33/2004, 34/2004, 35/2004 dt 03-12-2004)

Scope:

Goods Transport Agency: Means “any person” who provides services in relation to transport of good by Road and issues note, by whatever name called.

In most cases, liability for the GTA service shifted to service recipient.

The consignor or consignee. If falling under specified category as per provision will be liable, for compliance with the law viz., Registration, Payment of tax, filling of Returns.

(i)                  Factory registered under or governed by the Factories Act.

(ii)                Company established by or under the Companies Act

(iii)               Corporation established by or under any law.

(iv)              Society registered under Societies Registration Act or similar law.

(v)                Co-operative society established by or under any law

(vi)              Dealer of excisable goods, registered under the Central Excise Act.

(vii)             Any body corporate estb, or a partnership firm registered or under any law.

Liability cannot be shifted through mutual understanding.

Ø      Tempo-Mini trucks covered under Motor Vehicle Act. Transport of Goods by road in goods carriage is taxable. Goods carriage as per MV Act, 1988 means any motor vehicle constructed for use solely for carriage of goods or any motor vehicle not so constructed of adapted when used for the carriage of goods. A Tempo-Mini truck covered under ‘goods carriage’ for service tax purpose.

Ø      Liabilities of Govt.Deptartments, SSI Units and Material Transferred from Warehouse/godown to unit site:-

            *   There is no general exemption to Govt Dept.

            *    In respect of GTA service, Rule 2(1) (d) (v) of ST Rules 1994 makes the            

                  Consignor or consignee liable to pay S.T.

            *   Goods may be transported from WH to Unit / site where the Consignee or

                 Consigner is the same person.

(All above liable to pay service tax if they covered under the Seven Specified Categories.)

Clarifications from Govt:

According to Sec 69 of the Finance Act, 1994 requirements of registration is limited to person liable to pay service tax.

Centralized registration should not be denied.

No vehicle should be stopped on route for verification of service tax compliance unless there is specific information / intelligence about evasion of service tax.

Records pertains prior to the levy of service on transport of goods by road should not be called upon for verification.

In case of omission of tax or procedural lapses by person liable to pay service tax on GTA, committed before the dt 31-12-2005, the consequences should be limited to recovery of tax with interest i.e. no penalty should be demanded.

Abatement:

An abetment of 75% in taxable service of GTA is available on the condition that:

GTA has not availed the credit on inputs and CG used for providing taxable service and not availed benefit under Nofn. 12/2003 ST dt 03-12-2004 (1/2006 ST, dt 01-03-2006)

Abatement not deniable on procedural mistake. Declaration on receipt or bill or consignment note is not a statutory requirement. For lack of such declaration, abatement is not deniable.

Consignment Note:

Rule 4B of service tax rules prescribes that any ‘goods transport agency’ providing service in relation to transport of goods by road in a goods carriage shall issue a consignment note to the customer.

“Consignment Note” means a document, issued by goods transport agency against the receipt of goods for the purpose of transport of goods by road in goods carriage which is serially numbered.