GOODS TRANSPORT AGENCY SERVICE CHANGES AFTER 01.07.2012

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Definitions :
"goods transport agency" means  any  person  who  provides  service  in  relation  to transport  of  goods  by  road   and  issues  consignment  note,  by whatever name called

“goods carriage” has the meaning assigned to it in clause (14) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988);

"goods carriage“[Section 2(14)] means any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods;


Negative List  Service relating to transportation of goods

The following services provided in relation to transportation of goods are specified in the negative list of services:-
  1. by road except the services of 
    •  (i) a goods transportation agency; or
    •  (ii) a courier agency
  2. by aircraft or vessel from a place outside India up to the customs station of clearance in India; or
  3. by inland waterways.
So from point number 1(ii) it can be concluded that all road transport where goods transport agency is not involved ,then services are covered under Negative List.

Example of transportation of goods comes under negative list: 

1. A truck owner transporting goods directly without involvement of Goods of Goods transport agency.
2. A manufacturer Transporting goods to there dealer through their own transportation.
3. Transportation on bullock cart, tonga, rickshaw, thela etc – no tax
4.  Farmers transporting goods of fellow farmers after harvest from farms to sugar mills

Are service by way of giving on hire a means of transport to goods transport agency also covered under negative list?

As per serial number 22 service by way of giving on hire to goods transport agency a means of transport of goods is exempted.

Services by way of giving on hire 

(a) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or
(b) to a goods transport agency, a means of transportation of goods; 

The benefit in relation to vehicles provided to goods transport agency is presently available in terms of Notification No. 1/2009‐S.T., dated 5.1.2009.

Means of Transport has been defined in Place of provision of service tax rules ,2012.

“means of transport” means any conveyance designed to transport goods or persons from one place to another;
Are all services provided by goods transport agency excluded from the negative list?

Yes. However, there are separate exemptions available to the services(sr no 21 of negative list) provided by the goods transport agency. These are services by way of transportation of –

  1. fruits, vegetables, eggs, milk, food grains or pulses in a goods carriage;
  2. goods where gross amount charged on a consignment transported in a single goods carriage does not exceed one thousand five hundred rupees; or
  3. goods where gross amount charged for transportation of all such goods for a single consignee in the goods carriage does not exceed rupees seven hundred fifty.
This benefit is presently available in terms of Notification No. 33/2004‐S.T. and Notification No. 34/2004‐S.T., both dated 03.12.2004 and the same has been continued into the proposed negative list regime.


Are goods transport agencies liable to pay tax in all cases or are provisions relating to reverse charge also applicable after introduction of negative list?

The provisions relating to reverse charge, i.e. service tax is liable to be paid by the consigner or consignee in specified cases, are applicable even after the introduction of negative list.(Notification on reverse charge 30/2012 dated 20.06.2012)

List of specified Person covered under reverse charge for goods transport agency services is given as under.

Generally, service provider is responsible for payment of Service Tax.However, in case of Goods Transport Agency service the liability of paying Service Tax may fall on service receiver or service provider depending on the status of the receiver, as per Service Tax Rules 1994, taxable service is provided by a goods transport agency  to specified category of persons then service tax is liable to be paid by the consigner or consignee . 

where the consignor or the consignee is,—

(a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948);


(b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India;

(c) any co-operative society established by or under any law;

(d) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder;

(e) any body corporate established, by or under any law; or

(f) any partnership firm whether registered or not under any law including association of persons;


Some transporters under-take door-to-door transportation of goods or articles and they have made special arrangements for speedy transportation and timely delivery of such goods or articles. Such services are known as ‘Express Cargo Service’ with assurance of timely delivery. Whether such ‘Express cargo service’ is excluded as courier agency service under this negative list entry?

“Courier” has been defined in section 65B as any person engaged in door-to-door delivery of time sensitive documents, goods or articles utilizing the services of a person, either directly or indirectly, to carry or accompany such documents, goods or articles. The nature of service provided by ‘Express Cargo Service’ falls within the scope and definition of the courier agency. 

Hence, the said service is excluded from the negative list entry relating to transportation of goods by road.

Whether services provided by ‘angadia’ are liable to service tax as a courier service?

‘Angadia’ undertakes delivery of documents, goods or articles received from a customer to another person for a consideration. Therefore, ‘angadias’ are covered within the definition of a ‘courier’ and services provided by angadia are liable to service tax.


Are the following services of transportation of goods covered in the negative list entry?

Nature of service relating to transportation of goods
Whether covered in the negative list entry?
By railways
No
By air within the country or abroad
No
By a vessel in the coastal waters
No
By a vessel on a national waterway
Yes
Services provided by a GTA
No



Are services provided as agents for inland waterways covered by this entry?

No. these are in the nature of services used for providing the negative list entry service of  transport of goods on inland waterways and would not be covered by application of the rule for interpretation where services are specified by way of description contained in clause (1) of section 66F of the Act. (for guidance on this rule please refer to Guidance Note 9) 


What is the place of provision of a service of transportation of goods?

Place of provision of goods transportation services.- The place of provision of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of the goods: 

Provided that the place of provision of services of goods transportation agency shall be the location of the person liable to pay tax.

Place of provision of a service of transportation of goods is the place of destination of goods,except in the case of services provided by a Goods Transportation Agency in respect of transportation of goods by road, in which case the place of provision is the location of the person liable to pay tax (as determined in terms of rule 2(1)(d) of Service Tax Rules, 1994 (since amended).

What are the services covered under this Rule?

Any service of transportation of goods, by any mode of transport (air, vessel, rail or by a goods transportation agency), is covered here. However, transportation of goods by courier or mail is not covered here.

What does the proviso to this Rule imply?

The proviso to this Rule states as under:-

“Provided that the place of provision of services of transportation of goods by goods transportation agency shall be the location of the person liable to pay tax.”

Sub-rule 2(1)(d) of Service Tax Rules, 1994 provides that where a service of transportation of goods is provided by a ‘goods transportation agency’, and the consignor or consignee is covered under any of the specified categories prescribed therein , the person liable to tax is the person who pays, or is liable to pay freight (either himself or through his agent) for the transportation of goods by road in a goods carriage. If such person is located in non-taxable territory, then the person liable to pay tax shall be the service provider.


Illustration 1

A goods transportation agency ABC located in Delhi transports a consignment of new motorcycles from the factory of XYZ in Gurgaon (Haryana), to the premises of a dealer in Bhopal, Madhya Pradesh. Say, XYZ is a registered assessee and is also the person liable to pay freight and hence person liable to pay tax, in this case. 


Here, the place of provision of the service of transportation of goods will be the location of XYZ i.e. Haryana.

Illustration 2

A goods transportation agency ABC located in Delhi transports a consignment of new motorcycles from the factory of XYZ in Gurgaon (Haryana), to the premises of a dealer in Jammu (non-taxable territory). Say, as per mutually agreed terms between ABC and XYZ, the dealer in Jammu is the person liable to pay freight.

Here, in terms of amended provisions of rule 2(1)(d), since the person liable to pay freight is located in non-taxable territory, the person liable to pay tax will be ABC. Accordingly, the place of provision of the service of transportation of goods will be the location of ABC i.e. Delhi.

Abatement Rate in Goods Transport agency Services 

All abatements available to services of specified categories have now been merged in one exemption notification no 26/2012-ST dated 20/6/12. In terms of the said notification, exemption is granted from so much of the service tax leviable, as is in excess of the service tax calculated on a value which is equivalent to a percentage specified.

In Services of goods transport agency 75 % abatement is allowed and only 25 % services of gross amount is chargeable to service tax .

In Services of goods transport agency 70 % abatement is allowed and only 30% services of gross amount is chargeable to service tax  wef 01.04.2015

However with a condition that CENVAT credit on inputs, capital goods and in relation to transportation of goods. input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

Changes in Goods transport agency services after 01.07.2012 from old provisions has been tabulated is given  below. 

S. No.Amendment with their implications
1.Change in the person specified as “person liable to pay service tax”, in the rule:

EarlierReverse charge was applicable,where the consignor or consignee of goods falls under specified category.Earlier if the consignor or consignee falls under the specified category and the freight is paid by individual then it is the individual who is required to pay service tax under reverse charge.

This hardship is now removed as reverse charge is applicable only when the person liable to pay freight falls under specified category.
w.e.f. 1/07/2012Reverse charge is applicable,where the person who is liable to pay freight falls under specified category.
2.Change in the “specified category”, as given in the said sub-rule:

EarlierAny partnership firm registered, by or under any lawW.e.f. 01.07.2012 provision of reverse charge is applicable even if person liable to pay freight is unregistered partnership firm.

w.e.f. 1/07/2012Any partnership firm whether registered or not under any law including association of persons.
3.Inclusion of a new proviso to the said rule:

W.e.f. 1/07/2012Provided that when such person is located in a non-taxable territory, the provider of such service shall be liable to pay service tax.The implications are explained with the help of an example as given in illustration 2.

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. SECURITIES (MNP) (TDS)2007-08 ` 01.07.12 01.09.2008 01.10.2012 06.07.2009 07.08.2012 1 PERCENT EXCISE ITEMS LIST 1 sep 1% excise 10 year nsc 10(10C) 1000 court cases judgements supplied to ITO 1000 rupee note 11-2008 11-2010 130 items 14.08.2008 15 august 150 Rs coin 15g 15h 18-12-2009 192(1A) 192A 194 I 194A 194c from 01.10.2009 194H 194j 194LC 1981-2007 2% cst 2% excise 2004 2008 2008-09 FY 2010 206AA 234A 234B 234C 234c interest calculator 234E 23AC 23ACA 23B 24C 24q annexure II 25 paisa coin 271(1)(c) 271B 271H 272B 27A 280 280 challan 281 282 283 29 AUGUST 29.04.2010. 29/08/2008 29/2008 service tax 2g meaning use 3 idiots 30 MARCH 31st March 32-2010 33 of 2009 35(2AA) 35(2AB) 3CD 3g meaning use 40(b) 43B 44 AB EXEMPTED INCOME 44AA 44AB AGRICULTURE 44AB new limit 44AB NON RESIDENT 44ad 46/2012 45/2012 49C 5 day week 5 years post office deposit 5/2011 50 paisa coin 54b 54EC 54ee 54f 54gb 5th paycommission punjab 6 % excise 6 crore advance limit 6/2005 69/2010 6th cpc 6TH PAY COMMISSION 70% of pan etds 7th Central Pay Commission 8 tips to save tax 80C 80ccc 80CCD 80cce 80CCF 80CCG 80d 80DDB 80EE 80G 80GG 80GGA 80GGB 80ggc 80tta 80U 85% of pan etds 86/2008 DATED 13-08-2008 87A rebate 89(1) 89(1) relief calculator 9.5 % rate for private epf 92E 95% of pan etds 98 dated 04/01/08 aadhaar aakash tablet aam admi aar Aayakar Sampark Kendra abatement abolished ACCOUNT PAYEE DRAFT Accounting ACCOUNTING CODE accounting code for services ACCOUNTING FOR GOVT GRANTS accounting standards ACES ADD IN Add-Ins additional relief in budget 2010 adjustment of advance FBT with advance Tax advance rullings advance salary ADVANCE TAX CALCULATOR advance tax challan ADVANCE TAX CUT OFF AMOUNT ADVANCE TAX DATES AFFIDAVIT AG Projects Technologies Ltd RT age 80 addition pension aibea wage revision aibea wage revision latest news aiboa aiboc aiboc wage revision AIG AIR airline ticket booking tds airlines all is well allowances allownces alphabet of inspiration alteration on check allowed alternate minimum tax AMENDED 3CD amendment in companies bill 2011 amendment in gratuity act 2010 amendment in registration service tax AMENDMENT IN SERVICE TAX ON RENT amendment to finance Bill 2010 AMNESTY SCHEME 2007 amt Anna Hazare anna hazzare bill vs govt lokpal bill appeal apply for new pan card against old pan card aqb arbitration arrears of salary arrears of sixth pay ARRERS TAX AS-12 ASBA assessee in default ASSESSMENT REOPENING ASSESSMENT YEAR 2008-09 REFUND atm atm 100 per day atm cash without card atm tips atm wrong debit audit cases itr filing audit limit enhanced Audit Questionaire AUDIT REPORT AUS VS IND.INDIA VS SL Automated teller machine AUTOMATION OF CENTRAL EXCISE AND SERVICE TAX ay 2010-11 bad debts Bank Bank account bank audit bank audit 2012 bank charges BANK SALARY bank strike 06/07/09 and 07/07/09 banking law amendment banknotes banks npa provisioning BARE ACT bare rules BASE RATE BY BANKS bcct BIMAL JAIN biometric pan card black and white form not acceptable black money BLOCK PERIOD blogging bobay refund BONUS bonus share book discount BOOK ON EFILING BOOK REVIEW books of accounts BOOMING INDIAN ECONOMY both House rent allowance both hra and house loan Brass Scrap BRIBE CASE BROKER BSE bsnl broadband bsnl broadband usage bsnl land line sms alert BSR CODES BUDGET 2009 budget 2010 budget 2010-11 budget 2011 BUDGET 2012 budget 2013 BUDGET 2014