Gross biling in service tax

[Guest]

GOODS TRANSPORT AGENCY: My client is Public Limited Company owns trucks and wide spread agents for booking the goods.The Company raising GR to customers mentioning freight amount,stationery charges and handling charges(loading and unloading charges).For example: 1.Freight charges Rs 650 2.Stationery charges Rs 25 3.Handling charges Rs 125 TOTAL Rs 800 No service tax is collected from the customers since the freight amount is less than Rs 750/- under single consignment.Now 1.Whether gross billing attracts service tax since the gross amount exceeded the basic exemption limit of Rs 750/- by cosidering the Valuation Rules 2.Whether loading and un loading charges in relation to transport of goods falls under the purview of taxable service under CARGO HANDLING SEVICES which attracts 12.24% service tax and where as if it included in GTA it attracts only 3.06%

[Madhukar N Hiregange]

You should be taking a consultacny from someone nearby. Briefly a GTA is notliale to pay ST if the cusotmer is one of the specified persons namely: company registered firm, corporation etc. Only individuals and govt appear to be excluded where the GTA is liable. Where each consignment for the cleint to the same desitination is less than 750 there is no liability for anybody. Where the activity of loading and unloading is also done by him and it constitutes a substantial work then the coverage under cargo handling servcies maybe appropriate. The rate of tax would not determine where he is appropriately ocvered.

[Surender Gupta]

In your case correct classification is required to be done on detailed analysis of facts and circumstances. However, based on the facts mentioned in the query, whatever be the classification, you have to include the loading and unloading charges in the gross value since the service is one.

AI Summary

Service tax on gross billing may apply when ancillary charges are included, requiring classification and valuation analysis. Whether gross billing by a Goods Transport Agency attracts service tax when freight is aggregated with ancillary charges hinges on classification and valuation. Respondents advise including ancillary items such as loading/unloading and stationery in the gross value when they form part of a single service, while noting that loading/unloading may instead qualify as Cargo Handling Services if it is a substantial, distinct activity. GTA liability also depends on the recipient's identity, and a detailed, facts-based classification and valuation analysis is recommended.