Service tax applicable or not
This query is : Resolved
04 October 2013
partnership firm engaged in the business of trading of sulphuric acid & provide transportation facility of that thing then whether service tax applicable on freight receive from transportation facility.
06 October 2013
GTA is applicable to Partnership firm also. If Consignment note is issued, service tax is to be calculated for value of above Rs.750/- and 25% of the freight value will have to be calculated. The transport owner is individual?
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26 October 2013
Sir ,
it is golden chemical transport Co. (Partnership Firm) which receive amount from customer for selling of Acid & Freight Amount(for providing transportation facility to customer) and both amounts are separately shown in invoice then whether service tax is applicable or not if yes what provision for that ?
the accountant of that firm says it is self service, so service tax is not applicable. then what is your opinion for that case
?
it is golden chemical transport Co. (Partnership Firm) which receive amount from customer for selling of Acid & Freight Amount(for providing transportation facility to customer) and both amounts are separately shown in invoice then whether service tax is applicable or not if yes what provision for that ?
the accountant of that firm says it is self service, so service tax is not applicable. then what is your opinion for that case
?
24 July 2025
Here’s the clarity on service tax applicability for your partnership firm engaged in trading sulphuric acid and providing transportation:
Key points:
Is service tax applicable on freight charges?
Yes, if the transportation service falls under Goods Transport Agency (GTA) services, service tax applies.
What is GTA service?
GTA means any person who provides service in relation to transport of goods by road and issues consignment note, etc.
When is service tax payable on freight?
If freight charges exceed Rs. 750 per consignment, then service tax is payable on 25% of the freight value.
Does it matter if the transport is by partnership firm or individual?
No, GTA provisions apply irrespective of the business structure.
What if transportation is “self-service”?
If the firm is using its own vehicles and drivers to transport goods for itself (i.e., carrying its own goods and not providing transportation to third parties), then service tax on GTA is not applicable since GTA service is for transportation provided to others.
Your case:
If your partnership firm provides transportation services to customers (i.e., charges freight separately and issues consignment notes for transporting their goods), then service tax on GTA applies on 25% of freight charges exceeding Rs. 750 per consignment.
If your firm is transporting its own goods only, then no service tax on freight (GTA) applies.
Summary Table
Situation Service Tax on Freight Applicable?
Transportation service provided to customers (3rd parties) Yes - GTA service tax applies
Transportation only for own goods (self-use) No - GTA service tax not applicable
Freight and goods value shown separately on invoice Service tax applicable only on transportation (freight) if GTA conditions met
References
Service Tax (GTA) Notification No. 30/2012-ST
Section on Goods Transport Agency under service tax law
Key points:
Is service tax applicable on freight charges?
Yes, if the transportation service falls under Goods Transport Agency (GTA) services, service tax applies.
What is GTA service?
GTA means any person who provides service in relation to transport of goods by road and issues consignment note, etc.
When is service tax payable on freight?
If freight charges exceed Rs. 750 per consignment, then service tax is payable on 25% of the freight value.
Does it matter if the transport is by partnership firm or individual?
No, GTA provisions apply irrespective of the business structure.
What if transportation is “self-service”?
If the firm is using its own vehicles and drivers to transport goods for itself (i.e., carrying its own goods and not providing transportation to third parties), then service tax on GTA is not applicable since GTA service is for transportation provided to others.
Your case:
If your partnership firm provides transportation services to customers (i.e., charges freight separately and issues consignment notes for transporting their goods), then service tax on GTA applies on 25% of freight charges exceeding Rs. 750 per consignment.
If your firm is transporting its own goods only, then no service tax on freight (GTA) applies.
Summary Table
Situation Service Tax on Freight Applicable?
Transportation service provided to customers (3rd parties) Yes - GTA service tax applies
Transportation only for own goods (self-use) No - GTA service tax not applicable
Freight and goods value shown separately on invoice Service tax applicable only on transportation (freight) if GTA conditions met
References
Service Tax (GTA) Notification No. 30/2012-ST
Section on Goods Transport Agency under service tax law
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