(comes into effect immediately, i.e., from 11th July, 2014).
Goods Transportation Agency services, as we know,are subject to full Reverse Charge Mechanism where the person liable to pay freight are amongest those as prescribed in Rule 2(1)(d)(i)(B) of the Service Tax Rules, 1994. However, there are certain exemptions provided for GTA services under Mega Exemption Notification No. 25/2012-ST dated 20-06-2013.
The Union Budget 2014-15 has gone further ahead and has inserted certain new exemptions which inter alia include two services provided by GTA. The new exemptions of GTA services are listed below:-
i) Transportation of organic manure by road (GTA).
ii) Transport by road (by GTA) of cotton, ginned or baled.
Notification No. 6/2014-ST dated 11th July, 2014 to this effect has been issued.
The Finance Minister in its budget speech has said that at request of the Ministry of Agriculture inter alia service tax on transportation of cotton, whether ginned or baled, is being exempted to bring it at par with certain other agriculture produce.
In view of above new exemptions, such services provided by GTA are no longer taxable from 11th July, 2014 and consequently the requirement of payment of service tax by the service recipient in such cases under Reverse Charge Mechanism has also evaporated.