Advance amount - GTA

[Vijay Chitte]

Dear sir, As per your opinion in ID no.93 regd. Advance amount received, it is taxable for service provider, But In case of GTA service, If advance amount paid to transportor is taxable, so pls. provide a notification/circular/rules.

[Surender Gupta]

There is no saperate notification or circular in this regard till now but you are advised to read section 65(105) with Section 68 with notification no. 36/2004 and Rule 2 of Service Tax Rules. The conclusion is that first is to be determined what is taxable and than who is liable to pay service tax.

AI Summary

Taxability of advance payments under service tax: advance to transporters treated as taxable, liability depends on service classification. Whether an advance payment to a transporter under a Goods Transport Agency arrangement is a taxable service receipt must be determined by classifying the transaction under the service tax definitions; there is no separate circular for advances to transporters. Apply Notification No. 36/2004 and Rule 2 of the Service Tax Rules to decide if the receipt is a taxable service, and then determine the incidence of liability-who is obligated to pay the tax.