S.Tax on Own Vehicle

[Mathurthi RamKumar]

Dear All,

Greetings of the day.

How to treat S.tax calculation

A) if a company use a own vehicle for good transport from factory to customer godown. In some cases customer will pay the transport amount or company (Manufacture) will bear transport amount.

B) If company use vehicle for other purpose (i.e transport of raw material from supplier to factory) any liability is there for pay S.Tax?

Kindly give guidance for above points.

Regards

M.RamKumar

[Rajagopalan Ranganathan]

Sir,

As per Section 65 B (44) of finance Act, 1994, 'service' means any activity carried out by a person for another for consideration. If you use your own vehicle for fetching the raw materials from the supplier or to deliver finished goods to your customer then there is no question of providing service by one person to another for consideration. But if you collect freight from your customer then you are providing service to your customer and hence you are liable to pay service tax on such consideration received by you.

As far as aw material is concerned since the same belong to you and transporting the same in your vehicle to your factory cannot be termed as an activity carried out by a person to another for consideration. Hence for this activity you need not pay service tax. This is my opinion.

[PAWAN KUMAR]

Dear Sir,

As per my view, no consideration involve in the instant case, hence not liable for service tax.

[YAGAY and SUN]

We are in agreement with the reply submitted by Rajagopalan Sir.

[ashish chaudhary]

Transportation of Goods by road is covered by Negative List except when provided by GTA or courier agency. As the company has not been acting as GTA/courier agency, no ST applicable on transportation charges recovered from customer.

AI Summary

Service tax on freight: collecting freight is consideration and attracts tax unless transport is of own goods or excluded by the negative list.
Service tax is not payable where a company transports its own goods without charging freight, because no service for consideration is provided; collecting freight from customers constitutes consideration and prima facie attracts service tax. However, transportation of goods by road is typically excluded under the negative list unless rendered by a goods transport agency or courier, so charges recovered from customers by a non-GTA/non-courier ordinarily remain outside service tax.