Service tax on transportation of goods by road

[MAYUR DODIYA]

(1) Is service tax is chargeable on transportation of goods by road where consignment note/Lorry Receipt/Any other document in receipt of goods is not issued by vehicle owner and who himself runs vehicle or who runs vehicle through hired person who works under direct control and supervision of vehicle owner ?  Further, in this case, does it make any difference if total value of freight is more than Rs.1500/- irrespective of number of consignment carried by vehicle? 

[Madhukar N Hiregange]

The transportation of goods by road has been specifically excluded from taxability under the negative list except for Good Transport Agent [ Normally understood as transportation thru a booking agent] The GTA normally issues a LR/ CN which is a negotiable document and takes responsibility for the goods.

The truck owners/ operators however are in the unorganized sector where they ply as per needs pof client. Ex- shifting of granite blocks/ iron ore from mine to the port. Or picking up material from a factory, delivering to the job workers/ transporters godown and bringing back material from the job workers. Billing done based on KM- daily/ monthly. Such persons would NOT be GTA . No liability even if the total freight is much above 1500.

AI Summary

Service tax on road goods transport typically not leviable, except where service qualifies as a Good Transport Agent with consignment responsibility. Service tax is generally not leviable on transportation of goods by road because it is excluded under the negative list, except for services of a Good Transport Agent who issues a negotiable consignment note/lorry receipt and assumes responsibility for the goods; truck owners/operators who carry goods directly in the unorganized sector are not GTAs and thus not taxable on such transport.