GTA Vs. Transproter

[ca c v suryam SURYAM]

Sir,

As per my understanding service tax is payable by the person who is liable to pay freight in the case of GTA transactions.  Now, GTA means the person who acts as a mediator between the consignor/consignee and the transporter.  For example, if A Ltd., engages a truck through an agent M/s. X and if all other conditions are met, then tax is payable by A ltd., under reverse charge. 

Suppose, if A Ltd., engages directly a truck from a transporter say GATTI / SRMT etc., who will discharge tax and they charge the tax also in their bills, then A Ltd., is not obligated to pay the tax under reverse charge.  If this understanding is correct, how A Ltd., proves that the transporter (GATTI / SRMT etc.,) transported the goods in their own vehicles but not engaging vehicle from others by them?  This may be case rearely with GTA also who may own truck.  How to prove to authorities that the service rendered by these persons in the capacity as Transporters but not as GTAs?

Thank you sir,

CA. C V SURYAM

 

 

AI Summary

Service Tax in GTA Transactions: Consignment Note Determines Liability, Not Vehicle Ownership, Under Finance Act 1994. In a discussion forum, a query was raised about the service tax obligations in Goods Transport Agency (GTA) transactions. The query highlighted that service tax is typically paid by the party liable for the freight under the reverse charge mechanism. If a company engages a transporter directly, the transporter charges the tax, and the company is not liable under reverse charge. The concern was how to prove that the transporter used their own vehicles. The response clarified that the issuance of a consignment note, not vehicle ownership, determines the nature of the service, as per the Finance Act 1994 and Service Tax Rules 1994.