CA
1135 Points
Joined January 2010
As far as I understand, the goods are being transported from stockyard to Port through railways. If yes, then it is not GTA (goods transport agency) services and the place of provision would be the destination of goods. If no, then the place of provision would be the location of person liable to pay tax i.e., it should be the location of person making payment to you. Thus, the scenario is very clear that you don’t have to pay tax.
However, in the first scenario, the liability would be upon you, as the destination of goods for you is only port, since, you are transporting the goods only till port. Had it been the case, that the goods would have been transported by you beyond port i.e., till the customer’s place outside India, then your services wouldn’t have been taxable.
You may also refer to the relevant extracts of the Education Guide for your reference:
“When the freight forwarder acts on his own account (say, for an export shipment)
A freight forwarder provides domestic transportation within taxable territory (say, from the exporter’s factory located in Pune to Mumbai port) as well as international freight service (say, from Mumbai port to the international destination), under a single contract, on his own account (i.e. he buys-in and sells fright transport as a principal), and charges a consolidated amount to the exporter. This is a service of transportation of goods for which the place of supply is the destination of goods. Since the destination of goods is outside taxable territory, this service will not attract service tax. Here, it is presumed that ancillary freight services (i.e. services ancillary to transportation- loading, unloading, handling etc) are “bundled” with the principal service owing to a single contract or a single price (consideration).”
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