Service tax on contract of carriage of waste material from c
This query is : Resolved
CA Durgesh Sharma
(Querist)
05 December 2015
We are constructing a building on behalf of our client. We have sublet this work to another contractor. Now We are paying a contract carrier for removing waste material from site.
What is our service tax liability on this carriage.
What is our service tax liability on this carriage.
AJAY SINGH
(Expert)
05 December 2015
Service tax Should be Raised 14.5% on 30@ amount of Invoice by Receiver of Service so You have to Pay Service Tax @14.5% on Transportation on 30% Amount of Invoice.
Message likes :
1 times
CA Durgesh Sharma
(Querist)
12 December 2015
What will be the head of service?
CA Durgesh Sharma
(Querist)
12 December 2015
What will be the head of service?
24 July 2025
Regarding **service tax on contract carriage of waste material from construction site**:
---
### Situation:
* You are the main contractor.
* You have sublet the construction work.
* You pay a contract carrier to remove waste material from the site.
* Question: What is your service tax liability on this carriage?
---
### Service tax liability:
1. **Nature of service:** The contract carrier is providing **"Goods Transport Agency (GTA) service"** if they are registered as a GTA or just transportation service.
2. Since you are paying the contract carrier, the **reverse charge mechanism (RCM)** is applicable on certain transport services.
3. According to service tax law (prior to GST):
* If you are paying to an unregistered transporter (or non-GTA), you have to pay service tax on **30% of the amount paid to the transporter**.
* The rate of service tax was 14% + 0.5% cess = 14.5% (before GST).
4. So, **you (the receiver of service)** are liable to pay service tax under reverse charge on 30% of the invoice amount of the contract carriage service.
---
### Head of service for this:
* The service is categorized under **"Goods Transport Agency (GTA) service"** or if not GTA, then under **"Transportation of goods by road service"** (service tax on transport services).
---
### Summary:
| Who pays service tax? | How much? | On which amount? | Service Head |
| ------------------------ | ---------------- | -------------------------- | ---------------------------------------------------------------- |
| You (receiver) under RCM | 14.5% (old rate) | 30% of invoice amount paid | Goods Transport Agency Service / Transportation of Goods by Road |
---
Let me know if you want me to provide the exact notification or circular reference.
---
### Situation:
* You are the main contractor.
* You have sublet the construction work.
* You pay a contract carrier to remove waste material from the site.
* Question: What is your service tax liability on this carriage?
---
### Service tax liability:
1. **Nature of service:** The contract carrier is providing **"Goods Transport Agency (GTA) service"** if they are registered as a GTA or just transportation service.
2. Since you are paying the contract carrier, the **reverse charge mechanism (RCM)** is applicable on certain transport services.
3. According to service tax law (prior to GST):
* If you are paying to an unregistered transporter (or non-GTA), you have to pay service tax on **30% of the amount paid to the transporter**.
* The rate of service tax was 14% + 0.5% cess = 14.5% (before GST).
4. So, **you (the receiver of service)** are liable to pay service tax under reverse charge on 30% of the invoice amount of the contract carriage service.
---
### Head of service for this:
* The service is categorized under **"Goods Transport Agency (GTA) service"** or if not GTA, then under **"Transportation of goods by road service"** (service tax on transport services).
---
### Summary:
| Who pays service tax? | How much? | On which amount? | Service Head |
| ------------------------ | ---------------- | -------------------------- | ---------------------------------------------------------------- |
| You (receiver) under RCM | 14.5% (old rate) | 30% of invoice amount paid | Goods Transport Agency Service / Transportation of Goods by Road |
---
Let me know if you want me to provide the exact notification or circular reference.
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