Liability to pay service tax under GTA

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This query is : Resolved

Mahesh Kasera (Querist)

31 August 2010 Would any proprietor( trader & manufacturer in plastic goods) is liable to pay service tax on GTA who paid FREIGHT INWARD greater than 1500/- on purchase and FREIGHT OUTWARD greater than 1500/- on sale. In which case he is liablel to pay ST.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

01 September 2010 Question not clear. Is he a GT operator/wner or an agent?

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Mahesh Kasera

Mahesh Kasera (Querist)

01 September 2010 Dear Sir, He is trader and manufacturer

Mahesh Kasera

Mahesh Kasera (Querist)

01 September 2010 Would any proprietor( trader & manufacturer in plastic goods) is liable to pay service tax on GTA who paid FREIGHT INWARD greater than 1500/- on purchase and FREIGHT OUTWARD greater than 1500/- on sale. In which case he is liablel to pay ST.

Amit Goyal

Amit Goyal (Expert)

01 September 2010 Rule 2(1)(d)(v) of Service Tax Rules, 1994 provides that in relation to any taxable service provided by a goods transport agency, where the consignor or the consignee of goods is –
(a) any factory registered under or governed by the factories Act, 1948 ( 63 of 1948);
(b) any company ...........;
(c) any corporation .......;
(d) any society ...........;
(e) any co-operative ......;
(f) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 ( 1 of 1944) or rules made thereunder; or
(g) any body corporate established, or a partnership firm registered, by or under any law;

any person who pays or is liable to pay freight himself or through his agent for transportation of such goods by road or road carriage shall be the person liable to pay service tax.

If the consignor or the consignee doesn’t fall in any of the above categories than the goods transport agency shall be liable to pay service tax.

Mahesh ji, pls note that if any one of the consignor or consignee falls in the above categories, then the person who ever pays the freight will be liable to Service Tax.

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