S.tax on gta

This query is : Resolved

Guest

Guest (Querist)

01 December 2013 Dear Experts
We Pvt ltd company pay the transportation charges to the vehicle owner on transporting our goods from our place to the place of buyer

and the Vehicle owner does not issue any invoice / consignment note

then I want to know whether we are liable to pay service tax on such amounts in absence of any invoice or consignment note

Kindly make me clear

Goods transport agency” means
•any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.

CA S K MISHRA

CA S K MISHRA (Expert)
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01 December 2013 There is no excuse from payment of service tax on the plea that, the transporter has neither issued any invoice or consignment note.

You may deny that you have not received any consignment note or invoice but can not deny that you have not made any payment to the transporter, as the payment to the party is reflected in your books of account.

Irrespective of the fact that, whether a service provider /recipient has issued any invoice or not , if a service is not covered under "Negative List", it attract service tax.

Again, Goods transport by road is a taxable service under Service tax rule and it is covered under reverse charge category, where in the liability of payment of service tax has been bestowed on the service recipient. Service tax is payable after availing 75% abatement.

As such in the instant case, you are liable to deposit the service tax on transportation charges paid. However, no TDS is applicable on Transportation charges.

Guest

Guest (Querist)

01 December 2013 but sir we pay daily Rs. 3000 to Rs.4000 to the transporter (service provider) for delivering our goods to different Buyers

and each time we pay them Rs.600 for one round trip

then what sir

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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22 July 2025 Thank you for the detailed query. Here's a clear answer tailored to your situation regarding Service Tax on Goods Transport Agency (GTA):

🔹 Key Legal Definition (GTA)
As per Service Tax laws (pre-GST regime):

A Goods Transport Agency (GTA) means any person who provides service in relation to transport of goods by road and issues a consignment note, by whatever name called.

🔸 Your Situation
You're a Private Limited Company.

You're paying daily small amounts (₹600/round trip) to vehicle owners.

No consignment note is issued.

✅ Conclusion: You Are NOT Liable to Pay Service Tax in This Case
Why?

Because no consignment note is issued.

This is crucial — if a consignment note is not issued, the transporter does not qualify as a GTA under the law. In such a case, the transportation service is just a hiring of vehicle with driver, and not taxable under reverse charge as GTA service.

✳️ What Should You Do Practically?
Maintain records to demonstrate:

No consignment note was issued.

You hired vehicle for transport (like self-hire).

Payment was made for vehicle use and not a logistics service with responsibility for delivery.

Ensure the transporter is not a GTA — for instance:

Doesn’t operate as a logistics company.

Doesn’t take liability for goods in transit.

⚠️ Caution
If at any point:

A consignment note is issued, or

You’re hiring through a registered GTA,

then reverse charge applies, and you must pay service tax after availing abatement (typically 75%), and pay tax on 25% of the freight.

💡 Summary Table
Criteria Result
Consignment note issued ✅ GTA → Service tax applicable (RCM)
No consignment note issued ❌ Not GTA → Service tax not applicable

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