Taxability of service

[Mujahid Khan]

Dear Sir

My brother is engaged in transportation of soil from mining area to brick fields and he does not connected with any other business on mining area.

Is his service is exempt under GST because he is providing only transportation services not other mining services.

Another issue is that he is going to purchase a new transportation vehicle(Dumper). Can he claim ITC for another business vertical he owns.

[Ganeshan Kalyani]

Transportation service is exempted under GST. The service of transportation service provided by Goods Transport Agency (GTA) is taxable under reverse charge basis.

[YAGAY andSUN]

In addition to above reply, ITC on Dumper/Tipper/Forklift/Hydra are allowed for movement of goods, provided output service comes under the purview of GST i.e. output services should be taxable services.

AI Summary

Goods transport agency reverse charge applies, and input tax credit on transport vehicles is available only if outputs are taxable. Transportation services are described as generally exempt, but services provided by a Goods Transport Agency are taxable under the reverse charge mechanism. Input tax credit on dumpers, tippers, forklifts or hydras used for movement of goods is allowed provided the related output services are taxable, implying ITC for a vehicle used in another business vertical is claimable only if that vertical supplies taxable services.