Service tax on GTA

[Murari Agrawal]

Dear Experts,

(1) We are removing goods upon payment of duty as well as on Job work. We are engaging local transporters from stands who do not issue any consignment note. Some of them issue bill on monthly basis giving details of each consignment and payment is made by cheque. Payment to some is made by cash against voucher. The amount of freight for individual consignments is between Rs. 700 to Rs. 1500.

(2) For Job work we are collecting the inputs from principal manufacturer and pay freight in the similar manner. We raise our bill for transportation charges. Some times, we pay less to the transporters than we collect.

(3) We are getting inputs from outside State. Transporter issues consignment note and the payment is made by us.

Kindly let us know our service tax liability in the above cases.

AI Summary

Service tax on goods transport agency: liability hinges on consignment note issuance, agency status, and retained commission.
Local transporters who do not issue a consignment note are self-employed and not GTAs, so service tax is not attracted; issuance of a consignment note and payment of freight by the payer renders the service taxable on the abated value with tax available as cenvat credit. Retaining a margin between amounts collected and amounts paid to transporters may be treated as commission income and taxable. Tax on inward transportation can be paid and credited using the GAR-7 challan.