Service tax on transporter

452 views 3 replies

Jitendra Singh

Article and audit assistant

54 Points Joined February 2013

Hello all members, The situation is transporter A giving its truck to another transporter B so that transporter B can give GTA service to his customer. The consignment note is issued by transporter B. Now, the query is whether transporter A is giving any service to transporter B. If yes, please state the service and its treatment as per Service Tax rules. Whether transporter A is liable for any service tax payment. TIA, Jitendra

Replies (3)

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

/forum/gta-service-tax-applicability-303607.asp

CA Aravind Penugonda

Chartered Accountant

316 Points Joined January 2016

Dear Mr. Jithendra Singh,

Services of giving a means of transportation of goods to a Goods Transport Agency is exempted from service tax by way of Sl. no. 22 (b) of Notification No.25/2012-ST dated 20.06.2012.

Ajay Chandramouli

Article Assistant

334 Points Joined August 2014

Dear Mr. Jithendra Singh,

Here there are three parties and three contracts

1.Customer 2. X ltd 3. Y Ltd

Contract of Customer with Y ltd is taxable and accordinly service tax needs to be dischraged by customer under reverse charge.

Now Y ltd approaches and avail the services of X ltd. The approach and contract can be of two types

Case - 1 GTA service

If the terms of contract places the risk of safe transportation of goods entirely on X ltd and a consignment note is issued then the service is in the nature of GTA and accordingly Y ltd needs to discharge service tax under GTA

Case - 2 Supply of Tangible goods

If the terms of contract is only for supply of vechicle and X ltd is no where responsible for the transportation of goods of ultimate customer then the exemption under 22(b) of 25/2012 is applicable as said by Mr.Aravind

The invoice shall also indicate only amount for the period for which vehicle is hired by Y ltd.

Note : Applicable VAT provisions needs to be examined