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ANIMESH PANDEY (Querist)
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10 February 2016 Sir,
we are using the goods carriage(vehicles) of our sister concern for transportation of goods from our premises to the premises of our distributors / buyers and we are paying rent to our sister concern for using their goods carrier .
My question is that whether GTA provision for payment of service tax would apply in this case or it is a negative listed service since my sister concern is not a Goods transport agency but a manufacturing company ??
URGENT

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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12 February 2016 Circular No:186 / 5 / 2015 - ST dated 5th October 2015 has in paragraph 3 stated as follows:

"Goods Transport Agency (GTA) has been defined to mean any person who provides service to a person in relation to transport of goods by road and issues consignment note, by whatever name called. The service provided is a composite service which may include various ancillary services such as loading/ unloading, packing/unpacking, transshipment, temporary storage etc., which are provided in the course of transportation of goods by road. These ancillary services may be provided by GTA himself or may be sub-contracted by the GTA. In either case, for the service provided, GTA issues a consignment note and the invoice issued by the GTA for providing the said service includes the value of ancillary services provided in the course of transportation of goods by road. These services are not provided as independent activities but are the means for successful provision of the principal service, namely, the transportation of goods by road."

Thus ANY PERSON who provides service to a person in relation to transport of goods by road and issues consignment note, by whatever name called is treated as a Goods Transport Agency. Your sister concern is A PERSON who has provided services to your concern (PERSON) in relation to transport of goods by road. The transport would have been accompanied by a challan of Note detailing the Consignor, place of despatch, Consignee and the destination, description of materials and quantity accompanied by necessary way bills or declarations issued by VAT authorities. This challan or note will be treated as Consignment Note.

Irrespective of the main business of your sister concern, it has provided you services of Goods Transport Agency, As the service recipient you are liable to deposit service tax on 25% consideration paid to your sister concern for such services under the Reverse Charge Mechanism. Such Service Tax paid is not CENVAT able i.e. you cannot avail of CENVATInput Credit on the duty paid.

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