Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
*****
Circular No. 186/5/2015-ST
New Delhi, dated 5th October, 2015
To,
Principal Chief Commissioner / Chief Commissioner of Central Excise, Service Tax
and Customs (All),
Director General of Service Tax
Director General of Audit
Director General of Central Excise Intelligence Principal Principal
Commissioners of Service Tax (All)
Commissioners of Service Tax (All)
Commissioner (DPPR)
[email protected]
Sir/ Madam,
Subject: - Service tax levy on services provided by a Goods Transport
Agency -reg.
The All India Transport Welfare Association (AITWA) has represented regarding
the difficulties being faced by the Goods Transport Agencies (GTAs) in respect
of service tax levy on the services of goods transport. Doubts has been raised
by the All India Motor Transport Congress (AIMTC) regarding treatment given to
various services provided by GTAs in the course of transportation of goods by
road.
- The issue has been examined. Since July 1, 2012, service tax has shifted
to a negative list regime, by which all the services except those covered in
negative list as mentioned in section 66D of the Finance Act, 1994 or those
exempted by notification are chargeable to service tax.
- Goods Transport Agency (GTA) has been defined to mean any person who provides
service to a person in relation to transport of goods by road and issues
consignment note, by whatever name called. The service provided is a composite
service which may include various ancillary services such as loading/ unloading,
packing/unpacking, transshipment, temporary storage etc., which are provided in
the course of transportation of goods by road. These ancillary services may be
provided by GTA himself or may be sub-contracted by the GTA. In either case, for
the service provided, GTA issues a consignment note and the invoice issued by
the GTA for providing the said service includes the value of ancillary services
provided in the course of transportation of goods by road. These services are
not provided as independent activities but are the means for successful
provision of the principal service, namely, the transportation of goods by road.
- A single composite service need not be broken into its components and
considered as constituting separate services, if it is provided as such in the
ordinary course of business. Thus, a composite service, even if it consists of
more than one service, should be treated as a single service based on the main
or principal service. While taking a view, both the form and substance of the
transaction are to be taken into account. The guiding principle is to identify
the essential features of the transaction. The interpretation of specified
descriptions of services in such cases shall be based on the principle of
interpretation enumerated in section 66 F of the Finance Act, 1994. Thus, if
ancillary services are provided in the course of transportation of goods by road
and the charges for such services are included in the invoice issued by the GTA,
and not by any other person, such services would form part of GTA service and,
therefore, the abatement of 70%, presently applicable to GTA service, would be
available on it.
- It is also clarified that transportation of goods by road by a GTA, in cases
where GTA undertakes to reach/deliver the goods at destination within a
stipulated time, should be considered as services of goods transport agency in
relation to transportation of goods for the purpose of
notification No.
26/2012-ST dated 20.06.2012, serial number 7, so long as (a) the entire
transportation of goods is by road; and (b) the GTA issues a consignment note,
by whatever name called.
- Pending disputes on the above issues may accordingly be decided
expeditiously.
- Trade & field formations may be informed suitably.
- Hindi version will follow.
Yours faithfully,,,,,,,,,,,,,,,
(Dr. Ravindra Kumar)
Technical Officer, TRU-II
F. No. 354 / 98 /20015-TRU
|