25 August 2014
My father is a Proprietor of a Goods Transportation office with a turnover of more than Rs. 1 Crore & he works on contract basis for lifting material from a limited co. to the respective parties. He do hire lorries from market & pay them hire charges for providing lorries, for which he gets freight paid either on 'Freight Paid' basis or on 'To Pay' basis.
A few days back, he lifted a material from such limited company for a freight of Rs. 10,000/- but such freight was on 'To pay' basis & so, was payable by the consignee. He got instructions from the consignee to charge ST in his bill @ 3.09% on freight amount & then such ST shall be payable by my father (proprietor of GTA). And so he did the same, so now MY QUESTION IS: -
1) Is he liable to pay ST or rather he can claim to be small service provider within the limit of Rs. 10,00,000/- (10 Lacs);
2) If its YES & he is liable to pay ST then what shall be the amount on the freight charge of Rs. 10,000/-;
3) By what time shall such ST is to be get paid;
4)Please provide me if there is any exemptions that can be claimed;
5) Please provide me with the provision mentioned in ST rules;
03 August 2025
Let's break down your query step-by-step regarding Service Tax (ST) liability for your father's Goods Transportation Agency (GTA) business:
1) Is he liable to pay Service Tax? Threshold limit for GTA services: Before GST, GTA services were exempt if the aggregate turnover did not exceed Rs. 10 lakh per financial year.
Since your father's turnover is more than Rs. 1 crore, he is liable to pay Service Tax on GTA services.
2) What is the service tax amount on Rs. 10,000 freight? The applicable Service Tax rate on GTA services was 4.5% (earlier 12.36%, but from 2012 reduced to 4.5% as per negative list regime).
If service tax @3.09% was charged, it might be a partial rate (please confirm), but the usual GTA ST rate was 4.5%.
Service tax on Rs. 10,000 at 4.5% = Rs. 450
If 3.09% is applicable (please check the period), then ST = Rs. 309 on Rs. 10,000 freight.
3) Who pays the service tax and when? The GTA service provider (your father) is liable to pay service tax to the government.
He can charge service tax separately to the customer (freight payer) and then remit it to the government.
Service tax payment is generally due by the 6th of the following month for the previous month’s collection.
4) Exemptions applicable GTA service provided by an individual or a HUF where the gross receipts are less than Rs. 10 lakhs are exempt. Not applicable here.
Transportation of agricultural produce, goods by a goods transport agency to or by a manufacturer, etc., had some specific exemptions.
But in your case, with turnover > Rs. 1 crore and contract basis, exemptions likely won’t apply.
5) Relevant provisions from Service Tax Rules Section 65(105)(zzzz) of Finance Act, 1994 defines GTA services.
Notification No. 25/2012-ST exempts GTA services if aggregate turnover Rs. 10 lakh Service tax rate on freight 4.5% (confirm exact rate for the period) ST on Rs. 10,000 freight Rs. 450 approx (or Rs. 309 if 3.09% rate applies) Who pays ST to Govt? Your father (GTA service provider) When to pay ST? By 6th of next month Any exemption? Not applicable at turnover > Rs. 10 lakh
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