Service tax on transport of material under road construction

1714 views
User Avatar

Proprietor
29 Points Posted on 14 November 2011

Friends,

Contractor "ABC & Co" has been awarded a contract of Construction of Road of 50KM.  "ABC & Co" has given a sub contracted to "JQK & Co" for Part Construction of Road of 25KM area. "JQK & Co" has given a contract to "XYZ" (Proprietor Firm) to transport the material (i.e. Gitti, Sand, etc) to "JQK & Co" site. The material which "XYZ" is transporting is owned by "JQK & Co".

 

 

As per service tax circular some of the service are exempted under service tax which include "Contruction of Rod & Bridges" and even the sub contrator are exempted under it.

 

Our query is service tax is laiable to "XYZ" (Transport Contractor) ?

 

Regards,

Gaurav Bhutani

 

Attached File : 552961 867317 circular no 147 16 2011 of service tax.doc downloaded: 179 times
Reply Share Follow
On 14 November 2011 at 17:12 Report
Replies (3)
User Avatar

Chartered Accountant
2083 Points Posted on 16 November 2011

Service provided by  XYZ is not construction of road, bridge etc. hence the benefit of exemption may not be available. Service provided by XYZ is classifiable under GTA for which no such exemptionis available. Circular No.147/16/2011 dated 21-10-2011 is relevant.
 

1 Reply
On 16 November 2011 at 09:48
User Avatar

Proprietor
29 Points Posted on 17 November 2011

 

 

Sir,

As XYZ is under GTA and working for "JQK&Co". Therefore the libality of paying service Tax is of "JQK & Co" as it is an organised company under the Service Tax Notification mentioned below.

Is this is right or not?

 

Notification No. 35/2004-Service Tax, dated 3rd December, 2004 prescribes that the
person making payment towards freight would be liable to pay the service tax, in case the
consignor or the consignee of the goods transported in one of the following,-
(i) Factory registered under or governed by the Factories Act;
(ii) Company established by or under the Companies Act;
(iii) Corporation established by or under any law;
(iv) Society registered under Societies Registration Act or similar law;
(v) Co-operative society established by or under any law;
(vi) Dealer of excisable goods, registered under the Central Excise Law; or
(vii) Any body corporate established, or a partnership firm registered, by or under any
law.
 
Regards,
Gaurav

 

 

 
Reply
On 17 November 2011 at 11:38
User Avatar

Chartered Accountant
2083 Points Posted on 17 November 2011

What I have answered is that the infrastructure based exemtion is not available to GTA service. In your case the GTA service is taxable and the liability is on JQK & co under reverse taxing.

1 Reply
On 17 November 2011 at 14:10

Leave a Reply

Post Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Recent Topics :

  1. Car purchase to be eligible for ITC
  2. GST Refund on payment to builder
  3. TDS u/s 194Q on electricity supply by DHBVN etc.
  4. Subject: Can I Apply for Fresh GST Registration on
  5. Additional place in GST RC
  6. Company 3 months old, INC-20A not filed, all 3 of
  7. How do I choose the Best GST Lawyers in New Delhi
  8. Loss on sale of residential flat after indexing al
  9. Short Deduction
  10. Large mismatch between AIS Business Receipts and G

More recent discussions | Post

Related Topics :

Loading