Is Service Tax registration mandatory for Proprietorship Trading Company?

[Chirag Vachhani]

Respected Sir/ Madam

Good Day………

I run one bellow stated proprietorship company

Business Type: Trading of Chemicals & Organic Fertilizer

Company Nature: PROPRIETORSHIP

Annual Turnover: ~ 2 Crores

I get transport Bill of ~ 80 Lakhs from Transporter annually.

Some transporter having service tax registration, Some have no

So i request you to know “is my Proprietorship trading company require to register in SERVICE TAX?”

[YAGAY andSUN]

The person who pays the freight is liable to pay the service tax under GTA Services. If you fall under this category then it is statutorily mandatory to get the RC from Service Tax Department. Further, you have also crossed the threshold limit.

[Ganeshan Kalyani]

Also refer :

³[(d) “person liable for paying service tax”, -

(i) in respect of the taxable services notified under sub-section (2) of section 68 of the Act, means,-

(A) in relation to service provided or agreed to be provided by an insurance agent to any person carrying on the insurance business, the recipient of the service.

²⁰[(AA) in relation to service provided or agreed to be provided by a recovery agent to a banking company or a financial institution or a non-banking financial company, the recipient of the service;]

²⁴[(AAA) in relation to service provided or agreed to be provided by a person involving an aggregator in any manner, the aggregator of the service:

Provided that if the aggregator does not have a physical presence in the taxable territory, any person representing the aggregator for any purpose in the taxable territory shall be liable for paying service tax;

Provided further that if the aggregator does not have a physical presence or does not have a representative for any purpose in the taxable territory, the aggregator shall appoint a person in the taxable territory for the purpose of paying service tax and such person shall be liable for paying service tax ]

(B) in relation to service provided or agreed to be provided by a goods transport agency 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:

Provided that when such person is located in a non-taxable territory, the provider of such service shall be liable to pay service tax.

[KASTURI SETHI]

I support the views of both experts.

AI Summary

Service tax registration for freight-paying traders: freight payers under GTA rules must register and obtain RC if liable. Liability to register for service tax depends on whether the trader pays or is liable to pay freight for road transportation: a freight-paying trader is the person liable under GTA services and must obtain service tax registration and an RC if the applicable registration threshold is crossed; statutory categories of recipients (e.g., factories, societies, co operatives, excise-registered dealers, bodies corporate, partnership firms) are specifically identified as liable payers with alternate rules where the recipient is outside the taxable territory.