godds transport service

[HIMANSHU JARIWALA]

The query is relating to goods transport agency service:
1.
My client, a private limited company, say ABC Pvt. Ltd. purchases imported coal from PQR Ltd. and sells the same goods to Mills, a factory, located in Pandesara & Sachin, without taking any delivery. Such goods are transported directly from Magdalla port to Mills, located in Pandesara & Sachin. The billing system for transportation charges are as follows:
Rs.100/- Rs.120/- Rs.150/- Transporter X ==
PQR Ltd. ==> ABC Pvt. Ltd.
Mills, located in Pandesara & Sachin Neither Transporter X nor my client owns any truck but both the parties have taken registration under Goods Transport Agency services as “ServiceProvider”. Both the parties issue bill writing narration “TransportationChargesfrom MagdalaPorttoMil” so w.e.f. 01/07/2012, who is the person liable to pay service tax & on what amount?

Does it make any difference if we open new proprietorship concern w.ef.07/07/2012 and start billing as follows?
Rs.100/- Rs.120/- Rs.150/- Transporter X =
PQR Ltd. =
ABC =
Mills, located in Pandesara & Sachin Proprietorship Concern
In this case, who is the person liable to pay service tax & on what amount?

2. Is it till legally valid w.e.f.01/07/2012 under reverse charge mechanism that GTA collects service tax from the service receiver and pay to credit of the central government as majority of the service receiver does not have Service Tax Number?

[Vijay kumar]

Dear Sir, In terms of notification no 30/2012, in respect of the six categories of persons (including a factory registered under the factories act & a body corporate), the service tax under GTA has to be paid by the receiver of service who bears the freight. In your case, if the freight is ultimately borne by the Mill and it happens to fall under any of the six categories under the said Notification, they have to pay the service tax. If it is an input service for them to provide a taxable output service or to manufacture dutiable goods, they can take credit of the tax paid. As regards the 2nd query, if the receiver does not fall under the said categories, the GTA should pay the service tax as the service provider, subject of course to the exemption limit of Rs.10 lakh available to him as a service provider under Nofn.33/2012-ST, which however, is optional.

AI Summary

Reverse charge on goods transport services: receiver liable if a specified category; otherwise GTA must pay service tax. Under Notification No.30/2012, where freight is borne by the service receiver and the receiver falls within the specified categories, the receiver who bears the freight is liable to pay service tax; such receiver may claim input tax credit if the transport is an input for a taxable output or manufacture of dutiable goods. If the receiver does not fall within those categories, the GTA (service provider) must pay service tax, subject to the optional small-provider exemption in Notification No.33/2012.