St on gta service

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2017 We are manufacturing a product for which Main Raw Materials are Agri Procucts, Rice, Pulses, Oil Cakes etc. We get them in trucks & pay freight. Are we liable to pay service tax on that under GTA or it is exempted?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 June 2017 Only agricultural produce transportation is exempted from service tax.
Agricultural produce has also been defined in section 65B of the Act which means any produce of agriculture on which either no processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market.
Rice transportation is exempted from service tax but not oil cake.

Querist : Anonymous

Querist : Anonymous (Querist)

10 June 2017 Dear Sir, Thank you very much.

Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2017 Dear Sir, It means in case any Service Tax has been wrongly paid by us, we can claim refund for the same. Plz provide a brief introduction of the same. We have not passed on the burden of the same to anybody.

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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25 July 2025 You're absolutely right to seek a refund if **Service Tax was wrongly paid on exempted transportation services**, like **transport of rice** — which qualifies as **agricultural produce** under the law.

Let’s walk you through this clearly:

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## ✅ 1. **Was the Transport of Rice Exempt under Service Tax (GTA)?**

Yes — under **Notification No. 25/2012-ST**, as amended:

> **Services by a Goods Transport Agency (GTA) by way of transport of agricultural produce** are **exempt from Service Tax.**

### What qualifies as **agricultural produce**?

As per **Section 65B(5)** of the Finance Act, 1994:

> Agricultural produce means **any produce of agriculture** (including rice, pulses) on which:

* No processing is done **OR**
* Processing is done that does **not alter essential characteristics**, but **makes it marketable in primary market**

✅ **Rice and pulses** → Covered
❌ **Oil cakes** (processed in oil mills) → **Not covered**

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## ✅ 2. **Wrongly Paid ST on Exempt Transport — Can Refund Be Claimed?**

Yes, you can file a **Service Tax Refund Claim** under **Section 11B** of the Central Excise Act, 1944 (made applicable to ST cases).

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## ✅ 3. **Conditions for Refund Eligibility**

You must prove:

1. **ST was actually paid** by you to the government
2. The services (e.g. GTA for rice) were **exempt under law**
3. You have **not passed on the burden** of ST to another party (i.e., no unjust enrichment)

✅ You mentioned that the burden was **not passed on**, which is essential.

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## ✅ 4. **Steps to Claim Refund**

### 📋 Documents Required:

* Copy of **original invoices** showing freight + ST paid
* Proof of **payment to GTA** and **ST deposited**
* **CA Certificate** or self-declaration that burden not passed on
* **Covering letter/request** for refund
* PAN, registration certificate, and canceled cheque (for refund credit)

### 🕒 Timelines:

* Refund claim must be filed **within 1 year** from the date of payment
(though this may be relaxed in genuine cases with proof)

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## ✅ 5. **Filing Process**

You can:

* File refund manually at the **jurisdictional Central Tax/Excise office**
* Or, if applicable, file via **ACES portal** (pre-GST era online system)

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## 🧾 Summary:

| Item | Status |
| ------------------------------------------------------------- | --------------------------------------------- |
| Transport of rice/pulses | ✅ Exempt from ST |
| Transport of oil cake | ❌ Taxable under GTA |
| Can refund be claimed if ST wrongly paid on exempt transport? | ✅ Yes |
| Key condition | You **must not have passed on** the ST burden |
| Refund timeline | Within **1 year** of ST payment (ideally) |

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Would you like a **draft format** for the refund application letter or a **CA certificate template** for "no unjust enrichment"?

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