Service tax on loading & unloading charges

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 August 2012 We are paying loading & unloading charges to outsider worker by cash on daily bases, Please guide me service tax is applicable on it?

C.A Anshul Singhal

C.A Anshul Singhal (Expert)
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16 August 2012 ssue: GTA provides service to a person in relation to transportation of goods by road in a goods carriage. The service provided is a single composite service which may include various intermediary and ancillary services such as loading/unloading, packing/unpacking, transshipment, temporary warehousing. 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 intermediary and ancillary services. In such a case, whether the intermediary or ancillary activities is to be treated as part of GTA service and the abatement should be extended to the charges for such intermediary or ancillary service?

Clarification: GTA provides a service in relation to transportation of goods by road which is a single composite service. GTA also issues consignment note. The composite service may include various intermediate and ancillary services provided in relation to the principal service of the road transport of goods. Such intermediate and ancillary services may include services like loading/unloading, packing/unpacking, transshipment, temporary warehousing etc., which are provided in the course of transportation 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. The contention that a single composite service should not be broken into its components and classified as separate services is a well-accepted principle of classification. As clarified earlier vide F.No. 334/4/2006-TRU dated 28.2.2006 (para 3.2 and 3.3) and F. No. 334.1/2008-TRU dated 29.2.2008 (para 3.2 and 3.3), a composite service, even if it consists of more than one service, should be treated as a single service based on the main or principal service and accordingly classified. While taking a view, both the form and substance of the transaction are to be taken into account. The guiding principle is to identify the essential features of the transaction. The method of invoicing does not alter the single composite nature of the service and classification in such cases are based on essential character by applying the principle of classification enumerated in section 65 A. Thus, if any ancillary/intermediate service is provided in relation to transportation of goods, and the charges, if any, for such services are included in the invoice issued by the GTA, and not by any other person, such service would form part of GTA service and, therefore, the abatement of 75% would be available on it.

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RENGARAJ R.K

RENGARAJ R.K (Expert)
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16 August 2012 Paying the loading & unloading charges will not come under service tax for the service provider since these are all expenses for him.

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Vaiyapuri kannan

Vaiyapuri kannan (Expert)
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14 July 2015 In normal course of GTA contract , loading and unloading charge on outward and inward feight will be recovered by the service provider along with feight amount agreed thru a consolidated freight bill . In this scanario , loading and unloading charge would be considered as one of the intermediate serviuces under a composite contract for GTA and hence service receiver has to pay ST on consoilidated freight bill after availing abatement on total amount including loading and unloading charges