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Service tax implication on vehicles hired to courier agency

Thiyages (Consultant) (26 Points)

24 July 2015

Sir,

We are a proprietorship concern entered into agreement with a courier company for hiring out our vehicles (03) for a fixed monthly payment. Driver is povided by us. The said vehicle with driver will be at the courier company's disposal only and will be used for the purposes of carrying their goods, documents, pracels as they require for pick up or delivery of the same. What is the Service Tax implication in this?,

Whether I am liable to pay tax under

- GTA Service? or

-Supply of Tangible goods service? or

- I am Exempt as per Section 66D (p) (i) entry in Negative List

Thanks in Advance

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5 Replies

JAGANATHAN R ACMA, SAP(Fi-Co) (Manager Accounts and Finance) (915 Points)
Replied 24 July 2015

Originally posted by : Thiyagarajan
	Sir, We are a proprietorship concern entered into agreement with a courier company for hiring out our vehicles (03) for a fixed monthly payment. Driver is povided by us. The said vehicle with driver will be at the courier company's disposal only and will be used for the purposes of carrying their goods, documents, pracels as they require for pick up or delivery of the same. What is the Service Tax implication in this?, Whether I am liable to pay tax under - GTA Service? or -Supply of Tangible goods service? or - I am Exempt as per Section 66D (p) (i) entry in Negative List Thanks in Advance

Its applicalbe as GTA Vide Notifcatin number 13/2012

1 Like

Thiyages (Consultant) (26 Points)
Replied 27 July 2015

Originally posted by : JAGANATHAN R
	Originally posted by : Thiyagarajan Sir, We are a proprietorship concern entered into agreement with a courier company for hiring out our vehicles (03) for a fixed monthly payment. Driver is povided by us. The said vehicle with driver will be at the courier company's disposal only and will be used for the purposes of carrying their goods, documents, pracels as they require for pick up or delivery of the same. What is the Service Tax implication in this?, Whether I am liable to pay tax under - GTA Service? or -Supply of Tangible goods service? or - I am Exempt as per Section 66D (p) (i) entry in Negative List Thanks in Advance Its applicalbe as GTA Vide Notifcatin number 13/2012

> Here no consignment note is issued.

> Only consolidated monthly payment is received.

> The vehicle will be totally at the disposal of the Courier company, unlike GTA service.

How it can be classified under GTA service? Pl. Clarify

Niraj Kumar Sinha (Sr. Officer, SPSIL) (648 Points)
Replied 27 July 2015

This will be treated as Rent a Cab service and if courier company is a Limited or private limited, it will come under reverse charge.

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Thiyages (Consultant) (26 Points)
Replied 27 July 2015

Originally posted by : Niraj Kumar Sinha
	This will be treated as Rent a Cab service and if courier company is a Limited or private limited, it will come under reverse charge.

Sir, Thanks for the reply. Rent-a-cab service is attracted only when carriage of passengers is involved. But in this case the vehicle is provided for carrying parcels and letters. Therefore, Rent-a-cab is not attracted.

Kashish Gupta (B.com (H) , ACA) (368 Points)
Replied 27 July 2015

This is Renting of Motor Vehicle Service.

If it is for ,a period of 1 month, Place of Provision of Service Rule 9 is applicable and PoPS will be at the location of Service Provider i.e. at your registered premise (if centralised registeration is taken)

If renting is for a period of more than 1 month, PoPS Rule 3 is applicable and Location of Serviec Receiver is the place where services are provided.

Now considering the issue whether it is taxable :

You are providing service of renting of motor vehicle. Yes it is taxable.

It is not taxable as GTA Service nor covered under negative list of services.

1 Like