Chargiability of service tax

[Asked by Guest]

Dear Sir, Since Nov 1996 we are registered under Courier Services and providing Express Cargo Services on movement of Cargo by Road, time sensitive in nature. and door to door service. On 6th of August 08 there was a Circular 104 issued by Gautam Bhattacharya Commissioner (Service Tax) , regarding Service Tax on GTA services where the Rate defined is @ 12.36% on 25%(Or 3.09%) of the Service Charges. Based on the Circular we are receiving many calls from our customers that we should charge Service Tax as GTA services only. Now our query is whether the Services Provided by Courier Agencies related to Transportation by Road and the GTA services comes under one Net and Charge as GTA or we have to still charge service tax @ 12.36% on complete service charges? As of now there is no specific notification related to GTA / Courier Agency Services where the services are almost same but the rate of Service Tax differs.

[Surender Gupta]

I think the contents of a circular can not override the provisions of the Act. You may take the shelter of the circular only if there is confusion or your services are in the nature of transport of goods by road. In case, there is no confusion and apparent facts in favor the classification of services within the category of “Courier Service”, you may continue under the same.

AI Summary

Service classification: circular guidance cannot override statute, clear courier facts justify continued courier tax treatment.
A departmental circular cannot override the statute; it affords guidance only where factual classification is unclear. If the operative facts clearly establish provision of courier services, the supplier may continue charging service tax under the courier classification rather than reclassify as a Goods Transport Agency based solely on the circular.