Goods transport agency v/s transportation of goods by road

Queries 2299 views 9 replies

sagar kotak

article

65 Points Joined March 2009

Dear Sir,

Greetings of the day

Seek a professional advice on the following issue

An Individual, Suppose for the time being is Mr. A., is having 4 mini trucks (Tempo) and all four trucks are give in a hire to ABC & Co. (A Proprietary Concern) for a Fixed amount per truck per month. They also fixed the upper limit of truck running (in Kms) per month. During this time Mr. A is restricted to give their trucks to others

ABC & Co. (Proprietary Concern)

ABC & CO. is authorised LPG Gas Cylinder dealer, and provides home delivery facility of LPG cylinders to their customers.

For that ABC & CO. fixed a spot(s) in the city and gas cylinders are taken form godown to the fixed spot by Hired trucks. From each spot delivery men of ABC & Co. takes cylinders and delivered it to home to home.

My Questions is..?

Whether Mr. A. is Considered as GTA for the service tax purpose.
If Not Whether is it covered under negative list which exempt the service of road transportation of goods by road .. (Except GTA and Courier services)

Thank you in advance

Regards

CA Sagar Kotak

Replies (9)

Manoj Agarwal

Service Tax Consultant Rourkela Service

3456 Points Joined March 2012

1. Mr. A is not a GTA

2. He is not covered under the Negative List u/s 66D

3. Mr. A is providing the service of hiring of truck to a person other than GTA, which is covered under 'supply of tangible goods' and taxable if there is no 'tranfer of right to use such goods'. However, if the transaction of hire amounts to 'transfer of right ot use such goods' then service tax is not applicable as it tantamout to deemed sale as per Article 366(29A) of the Constituion of India, and as per state law, VAT may be levied.

sagar kotak

article

65 Points Joined March 2009

Whether abatment of 60% is allowed in this case... Consider mini truck as a "Motor Vehicle"

Regards

CA Sagar Kotak

Manoj Agarwal

Service Tax Consultant Rourkela Service

3456 Points Joined March 2012

Abatement of 60% is available on renting of any motor vehicle designed to carry passengers. No abatement on trucks given on hire.

Madhukar N Hiregange

Chartered Accountant

39039 Points Joined September 2008

He is a GTO and not a GTA therefore not liable.

Since the trucks are given with the driver, the control and possession is not handed over therefore not a right to use. The service is a transportation service therefore excluded in negative list.

Manoj Agarwal

Service Tax Consultant Rourkela Service

3456 Points Joined March 2012

Respected Sir, The querist has mentioned that trucks are hired on fixed amount per truck and for the exclusive use of the receiver. The query doesn't mention that driver is also provided by Mr. A (GTO). Assuming, that driver is hired/employed by the receiver, what are the tax implications? Thanks & Regards, Manoj Agarwal