Clarification on Issues Pertaining to Levy of Service Tax on Goods Transport Agency

Service tax on goods transport: notifications set exemptions, payer liability, consignment-note and compliance modalities.

Service tax on goods transport agency, defined by Finance (No.2) Act, 2004, is governed by Notifications 32-35/2004 effective 1 January 2005. These notifications establish exemptions (75% exemption with no input/capital duty credit; exemptions for fruits, vegetables, eggs or milk; exemptions for consignments below specified gross-charge thresholds), designate liability to pay (freight payer in specified institutional cases; otherwise the goods transport agency), require serially numbered consignment notes with specified particulars, limit registration to persons liable, permit centralized registration, restrict en-route verification absent Commissioner-authorized intelligence, and limit penalties for pre-31December2005 lapses to recovery with interest except where fraud or intentional evasion is found. Double charging for the same consignment is disallowed.