Service tax liability on empty container

[Vijay Chitte]

Dear Sir, My query on GTA service e.i. If our company wants to transport the goods from Ahmedabad to Mumabi port. For that Transporter have to take empty container from our Ahmedabd port to our Ahmedabad factory and stuffing the container and transport theiron. My quiestion is, the transporter charge his transportation charges of empty container from Ahmedabad port to Ahmedabad factory is liable to pay service tax? Because empty container is not goods for us and catergory is stated only "Goods Transported by road" is liable to pay tax so, why we have to pay the service tax on empty container transportation charges? Anyone can guide me?

[Surender Gupta]

If the empty container is not a good, then what is it? Service Tax is payable in your case as "Goods Transport by Road".

[Madhukar N Hiregange]

The question and your reasoning is logical. However the taxable servcies is in relation to transport of goods which has wide implication. Under central excise this expression was litgated and it has been held to have a wide coverage. This activity therefore being in relation to the goods would in my opinion be liable.

You need not pay service tax on the amount paid for the transportation of empty container as these charges are not for transporting goods by road. Moreover, the transporter will not give any consignment note for the empty trip. Issue of consignment note is mandatory to pay service tax on GTA services. Normally, the GC note is issued only when goods are taken and also GC note contains destination "FROM" and destination "TO". In the case of empty container, the transporter never raise GC note. However, if the freight bill is raised collectively as freight (for both up and down) or if any contract is entered wherein any specific mention about this amount merely as "freight amount in connection with the transportation of goods from the port), then the total up and down amount would be taken as "freight for transportation". We can not give any concrete advise without seeing the agreement between the company and the contractor. In general, for amount paid for movement of empty container to the port is a charge and not to be considered as "freight" in the absence of consignment note ( This contneiton is possible without any contract to pay amount both for up and down as freight for transportation of goods from the port to factory). Further, in respect of Valuation of excisable goods (particularly motor cars), no abatement is given for the amount paid for the return empty trip as the same is not considered as "Freight for transportation of excisable goods from factory to depot". You may take the same principle in respect of service tax payable on empty container trip. However, the Department officers may demand service tax even for the said amount under different head such as " Business support service" where the truck is placed in the port for which an amount is paid as charges not as a freight. S. Gokarnesan Advocate

AI Summary

Service tax on empty container transport hinges on classification as goods transport and presence of consignment documentation.
Whether empty-container movement is subject to service tax depends on classification as Goods Transport by Road, the existence of consignment notes, and how the contract/invoice aggregates or allocates outward and return freight; absent consignment documentation the return trip may be treated as a non-freight charge, though authorities might seek taxation under alternative heads such as Business Support Service.