goods transport sevice

[Guest]

GOODS TRANSPORT SERVICE IS ALSO COVERED UNDER REVERSE CHARGE UNDER SECTION 68 OF SERVICE TAX                                  

THAT PROVIDES THAT IF CONSIGNOR OR CONSIGNEE  IS COMPANY   (i.e. established under Companies Act, 1956)

WHEN GOODS SENT BY A COMPANY  TO AN INDIVUAL AND FREIGHT TO BE PAID BY INDIVIUAL

Q:     WHETHER INDIVUAL SHOULD BE REGISTERED TO SERVICE TAX ( GTA SERVICE IS RS.2000)

Q:     EXEMPTION  Notification No. 6/2005 IS NOT APPLICABLE IN REVERSE CHARGE CASE THEN AN INDIVUAL HAVE TO PAY SERVICE TAX ON GTA SERVICE?IS THERE ANY SECTION/NOTIFICATION/CIRCULAR PROVIDE EXEMPTION TO AN INDIVIUAL KINDLY GIVE ME ANSWER          

[YAGAY andSUN]

In this scenario the threshold limit of Rs. 10 lacs will play the role.

[Vivek Harsh]

Service tax as Reverse charge is applicable only  when consignor is in organized sector.

The service provider is responsible for payment of Service Tax. (Section 68 of Finance Act). However, in relation to taxable service provided by a goods transport agency, where the consignor or consignee of goods is,­

(a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948);
(b) any company established by or under the Companies Act, 1956 (1 of 1956);

(c) any corporation established by or under any law;

(d) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India;

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

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

(g) any body corporate established, or a partnership firm registered, by or under any law, 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;”

 

AS Individuals are not covered in the above list therefore liability to pay tax onu under reverse charge is not applicable.
 

[rajkumar shukla]

I feel that  this is the lacuna in drafting of this notification. 10 lakh exemption will not apply as  the tax liability in this case would be on individual under reverse charge . if either consignor or consignee is one of seven categories . then  the person paying the freight is liable to pay the tax.since consignor is company , individual is liable to pay tax  as he is paying freight.

AI Summary

Reverse charge on goods transport may require the freight payer to pay service tax when consignor or consignee is a specified entity. Liability for service tax on goods transport under Reverse Charge arises where the consignor or consignee is among specified categories (companies, factories, corporations, registered societies, cooperative societies, registered dealers of excisable goods, or registered firms); in those circumstances the person who pays freight is liable to pay tax. There is disagreement whether the statutory exemption threshold applies to relieve a payer made liable under reverse charge.