Service Tax Registration

[Anil Kumar]

Dear Sir,

we are manufacturing of distillation plant and are registered with central excise, we also undertake job work on challan, we come across transporting the chemicals in tankers, as per the reverse management notification 30/2012, for paying the service tax, do we have to register with service tax.

please clarify

thanks

regards

Aneel Kumar M

9246202389

[KASTURI SETHI]

Who pays the freight will pay Service Tax on the amount of freight after abatement of 70% from the gross amount of freight. In case you are bearing freight, get yourself registered with Service Tax under the category of GTA. Reverse charge mechanism is applicable to GTA service under Notification No.30/12-ST dated 20.6.12 as amended.

[Rajagopalan Ranganathan]

Sir,

I feel you undertake transportation of chemicals in tanker. This is covered by Goods Transport (GTA) Agency Service. As per rule 4 B of Service Tax Rules, 1994, a GTA is required to issue consignment note except when transport of goods by road is exempted. Issue of consignment note is compulsory only for GTA and not all transporters. If the goods transporter does not issue consignment note he is not 'goods transport agency' at all as per definition of GTA in Section 65 B (26) of Finance Act, 1994. Hence rule 4 B will not be applicable. Only in respect of GTA who provides GTA service in respect of transportation of goods by road, where the person liable to pay freight is,-

(I) any factory registered under or governed by the Factories Act, 1948 (63 of 1948);

(II) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India;

(III) any co-operative society established by or under any law;

(IV) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder;

(V) any body corporate established, by or under any law; or

(VI) any partnership firm whether registered or not under any law including association of persons;

any person who pays or is liable to pay freight either himself or through his agent for the transportation of such goods by road in a goods carriage.

Therefore only when the service provided by GTA the service tax is payable on the basis of reverse charge mechanism. Otherwise service tax is payable by the service provider subject to the limit that the value of service provided is within 10 lakhs rupees during previous year or does not likely to exceed the said limit during current financial year. You have to take registration only when you cross the limit of 9 lakhs.

If the value of service provided by you exceeds ₹ 10 lakhs during previous financial year then you have to take a registration. If you are a GTA and your customers fall in any of category listed above then your customer has to pay service tax on reverse charge mechanism and you customer has to take a registration.

[Ganeshan Kalyani]

I agree with both the experts opinion explained very well and covering every aspect in it. Thanks.

[YAGAY andSUN]

Under reverse charge mechanism you are person liable to pay the tax under GTA Service. There is no threshold limit available to persons liable to pay the tax under PRCM.

[DR.MARIAPPAN GOVINDARAJAN]

I hope that the querist is satisfied with the detailed explanations given by the experts.

[Ganeshan Kalyani]

The query dated 26.12 2015 and querist has showered with opinions of experts. I have observed other tax forum but there it takes time to get reply. But TMI has focused experts contributing their invaluable knowledge. Thanks to every experts for taking time and giving opinion without expecting return.

AI Summary

Reverse charge on GTA services makes the freight payer responsible for service tax and registration when applicable. Transport of chemicals in tankers may amount to Goods Transport Agency (GTA) service. If a person qualifies as a GTA and issues consignment notes, freight is taxable after prescribed abatement and the payer of freight is liable under the reverse charge mechanism. A manufacturer bearing freight must register and pay tax as the person liable under reverse charge. GTA providers must comply with consignment note obligations and may be relieved from reverse charge only where recipients do not fall within specified classes; providers otherwise follow normal registration rules when service turnover exceeds the statutory threshold.