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Service tax on goods transportation

MANISH GOYAL (individual) (102 Points)

11 January 2017

Sir, One of our client is providing goods carriage service to various contractors. We want to know that whether small scale exemption limit of Rs. 10 lakhs is applicable on this business. If yes then subject to what conditions and if no then what would be the service tax liability.

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Nikhil Sharma (Government Service) (539 Points)
Replied 11 January 2017

If your client is providing these services to organised sector , then he is not liable to pay service tax. This service will be covered under reverse charge mechanism and service receiver will be liable to pay service tax in those cases and there will be no exemption limit for them. Organised sector means factory registered under factories act, society, cooperative society, dealer of excisable goods, body corporate and any partnership firm whether registered or not including association of persons.

In other cases normal charge is applicable and exemption of 10 lakhs is available