Service tax on good transport agency ( GTA) has been exempted fully for some time but after some time due to revenue loss the service has been made taxable again.In this post, you can get details explanation for each rule which touches GTA service.
9 important points on service tax on good transport agency ( GTA service):
- Good transport agency definition
- Consignment note imporance
- Exemption to GTA service under service tax
- Reverse charge mechanism in good transport agency service
- Abatement to good transport agency service
- Place of provision of service with regards to GTA
- Point of taxation of service rules
- Registration requirement for GTA
- Cenvat credit avaibility for GTA service
Good transport agency definition:
As per section 65B(26),
Good transport agency means
“any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called”
Here we can part the definition and find important points:
- Any person : Means all the types of assessees are covered. Individual, HUF, company, AOP, BOI etc.
- in relation to : Means not only transportation activity of goods by road but other anciallary activities like loading, unloading, packing, unpacking, temporary warehousing are covered under GTA service if they are provided with relation to transportation of goods and not as independent activity. Benefit of it is that abatement is allowed to these services also.
- Consignment note : Most important point. Issue of consignment note is mandatory to conclude road transport as GTA service.
Consignment note:
As per explanation given under rule 4B of service tax rule, 1994,
Consignment note means
means a document, issued by a goods transport agency
against the receipt of goods for the purpose of transport of goods by road in a goods carriage,
which is serially numbered, and
contains the name of the consignor and consignee, registration number of the goods carriage in which the goods are transported, details of the goods transported, details of the place of origin and destination, person liable for paying service tax whether consignor, consignee or the goods transport agency.
Don’t forget to issue consignment note if you want to avail abatement or exemption for good transport service.
Exemption to gta service under service tax:
Following exemption is available to good transport agency service under service tax:
Transportation of following is exempt from levy of service tax:
- Milk, salt, food grains including flours, pulses, rice. ( Updated budget 2015-effective from 1st April, 2015).
- Agricultural produce
- Good transport service for transport of export goods by road from place of removal to inland container depot, a container freight station, a port or airport, land customs station. Updated notification no. 4/2015-st.
- Defense or military equipment
- Cotton, ginned, bailed ( budget 2014 changes.)
- Relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap
- Chemical fertilizer and oli cakes.
- Newspaper or magazine registered with registar of newspaper.
Agriculture produce definition as per service tax:
As per section 65B (5) of finance act, 1994, agriculture produce means
Any produce of agriculture on which either no further processing is done or such processing is done by cultivator or producer which does not alter its essential characteristic but makes it marketable for primary market.
Exemption based on consignment value:
As per mega exemption notification 25/2012-ST, there is exemption for low value consignment from levy of service tax:
- where gross amount charged for the transportation of goods on a consignment transported in a single goods carriage does not exceed Rs.1500; OR
- Where the gross amount charged for transportation of all such goods for a single consignee in the goods carriage is up to Rs. 750/-
Explanation:
- The first situation indicates exemption when total frient chared of all the consignments loaded in the truck is less than Rs. 1500.
- The second situation indicates exemption when single consignment freight does not exceed Rs. 750. This exemption is consignment wise.
TO determine taxability of consignment – point of view of GTA:
- First check total freight of consignments loaded in truck, if it is less than Rs. 1500, all the consignment in truck are exempt.
- If it is more than Rs. 1500, we require to check single consignment freight, if it is less than Rs. 750, that single consignment is exempt.
To determine taxability of consignment – point of view of gta service receiver:
- First check freight value of signle consignment, if it is less than Rs. 750, it is exempt from service tax.
- If it is more than Rs. 750, ask GTA about total freight of consignments loaded in truck, if it is less than Rs. 1500, consignment mentioned in point 1 is exempt otherwise service tax liability will be arisen. Also get written proof from GTA about consignment freight of all the consignments loaded in truck.
Example:
Pranav is liable to pay following freight charges for GTA service.
| Trucks | Freight of 1 truck | total | Consignments | Freight of 1 consignment | Total | Taxable | Total |
| 15 | 1300 | 19500 | No | 0 | |||
| 14 | 1600 | 22400 | Yes | 22400 | |||
| 200 | 500 | 10000 | No | 0 | |||
| 50 | 900 | 45000 | Yes | 45000 | |||
| Total Taxable value | 67400 | ||||||
| Tax payable at 30%of 14=4.5% | 3033 | ||||||
Reverse charge mechanism in good transport agency service:
As per notification no. 30 (2012)-ST entry no. (ii):
Reverse charge mechanism in good transport agency service is applicable when taxable service provided or agree to be provided by GTA in respect of transport of goods by road
where the person liable to pay freight is
- any factory registered under or governed by the Factories Act, 1948 (63 of 1948);
- any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India;
- any co-operative society established by or under any law;
- any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made there under;
- any body corporate established, by or under any law ( COMPANY); or
- any partnership firm whether registered or not under any law including association of persons (AOP);
When individual or HUF is availing GTA service and paying freight, they are not liable to pay service tax under reverse charge mechanism and good transport agency is liable to pay service tax on freight by charging in bill.
Abatement to good transport agency service:
As per Notification no. 26/2012 amended with notification no. 8/2015-st,
This abatement is available to GTA and service receiver too. The rate is 70% of service charges ( freight charges). It means service tax is paid at 15*30 = 4.5% on bill. The condition to avail this abatement is cenvat credit on input, capital goods and input services should not be taken under cenvat credit rules, 2004.
*Rate after swachh bharat cess + Krishi Kalyan Cess
From 1/4/2016 as per budget 2016 update,
For GTA, abatement on transport of used household goods is being rationalized with 60% abatement rate without availment of cenvat credit of inputs, input services and capital goods. For other goods, 70% abatement is available.
Place of provision of service:
As per place of provision of service rule, 2012,
place of provision of service for good transport agency is the location of person liable to pay tax under rule 2(1)(d) of service tax rules, 1994.
As per rule 2(1)(d) of service tax,
when GTA service is provided and service tax is payable under reverse charge mechanism , the person liable to pay service tax is the person or his agent who pays the fright. His location will be place of provision of service.
However, when that person is located in non taxable territory ( jammu Kashmir and outside India), person liable to pay service tax is GTA itself.
| GTA service provider | Service receiver ( Freight payer) | Place of provision | Person liable to pay service tax |
| Mumbai | Delhi- Company | Delhi | Company |
| Mumbai | Jammu | Jammu | GTA |
| Mumbai | Nepal | Nepal | GTA |
| Mumbai | Bhuj- Individual | Bhuj | GTA |
Point of taxation rules:
Point of taxation under reverse charge will be the date of payment when the payment is made within six months from date of invoice. Read this post for further clarification. https://taxmasala.in/point-of-taxation-rules-2011/
Cenvat Credit in GTA service:
Service tax paid under reverse charge mechanism for good transport agency service is available for cenvat credit utilisation if that service can be considered as input service as per cenvat credit rules.
Service tax registration for GTA service:
- Service provider is required to get service tax registration number if the taxable value of service provided during the year ( Excluding services on which service tax is payable by service receiver under RCM) exceeds Rs. 9 lakhs.
- Service receiver if liable to pay service tax under reverse charge mechanism should get registration irrespective of amount of service received.
Reference – service tax
CBEC clarification for ancillary service – circular no. 186/5/2015-st dated october 5,2015:
CBEC has clarified with circular no. 186/5/2015- ST that ancillary service like loading, unloading, packing, unpacking , transshipment, temporary storage etc. provided by GTA along with transport service are considered as composite service and abatement of 70% is allowed on these services. GTA is required to include those service in invoice.
I have tried to cover all the points related to service tax on good transport agency ( GTA service). Still if you have any questions, aks me through comments. Share this post to social media to encourage me to write more.
VERY GOOD INFORMATION , THANKS
SATISH KESTIKAR
our factory is unregistered partnership firm as well as unregistered under factory act also.
we are paying road transport freight direct to truck owner/driver without issue of consignment note or without GTA.
please guide us whether we are liable to pay service tax on freight.
Ramesh agarwal
Siliguri (W.B)
VERY GOOD INFORMATION
Thank you.
Ma’am
Our company get tally software modified. service tax paid on modification charges.
my question is can we treat this as input and can we take credit of service tax paid .
For it, you need to check input service definition and if software modification charge is available, your company can get credit.
Dear Mam,
According to new amendments for SERVICE TAX, is there any changes in SERVICE TAX for transporters, earlier it was 4.20%+0.15%(SWACHH BHARAT CESS).!!!!!
thanks for the article
My pleasure
thanks for ur information ….
please provide the applicability of service tax in case of gta providing service to another gta and the provisions for availing ccr and reverse charge in that case.
Check status of service receiver and apply reverse charge accordingly as per explanation given.
Very good ma’am,
keep writing
Thanks…
Very good information, Thanks Madam
Thanks for appreciation
It is manufacturing company IMFL, if there is any need to deduct service tax on transport of good by road from 01.06.2015.Please give me a advice madom
You are required to pay service under RCM if freight is payable by you. Please clarify question more.
Being a Service receiver can we avail credit on Service Tax paid(after abatement) for Freight Freight & Freight Inward
Yes, you can avail cenvat credit if as service provider you are not availing any abatement.
If any transport is registered under GTA. How much service tax he can charge to customer for the transportation of material by road? it is 14% or 4.2 %?
Charge 4.2% only if reverse charge mechanism is applicable. Please read post carefully. You will get answers of most of the questions.
HOW MUCH SECURITY SERVICE TAX EXEMPTION – AS PAR RULES CHANGE 1/6/15
There is no exemption for security service.
Mam Please tell me about goods transport operator (a person who having only 1 to 2 goods carriage for their livelihood) whether they covered under GTA service provider .
Please go through definition of GTA for it.
Mam if a company pay approx Rs .3000 per day to a goods carriage owner who only have one tempo, for supply of material to different customer but he not issued consignment note to company whether company will be liable for service tax under RCM on payment of freight .
under RCM we are suppose to charge service tax at full rate for Individual/HUF & Govt Agency; how to define proprietor ship firm. Is it individual or Firm or Company.
Proprietor ship means one person business ( firm or working on own name) and not registered as pvt ltd company.
Can you please clarify whether transportation of food grains including thru vessel is exempted from service tax
Transportation of food grains through road by GTA is exempt. For transportation through vessel, you need to reasearch.
can u present all these information in a table form? Like consignor , consignee, GTA amount paid by, who is responsible for payment of service tax…
Thank you for suggestion. I will add table for it. However, it takes time.
thank u
for easy understanding…
it s a Great think
Hi madam
I am starting my transport and logistic company under GTA regest ration from April 2016 weather I should charges service tax @ 4.2% or not kindley help out
regards
wheels logistics
satiesh
HI Ms Tarannum,
its fine article. I have a query- in the case of exports, whether services of the transportation of goods by road from place of removal/factory/WH via ICD/CFS ( where export formalities are done) to Port attract service tax? what if there are additional services such as stuffing/destuffing/loading/unloading, cfs charges,etc in this process involved and its taxability aspects?
There is exemption for service of GTA from icd to port. I have included the exemption in article.The exemption is for GTA service. Other services are taxable.
Hello, thank you for the article
My client is trading in steels as a part of which he collects Frieght from his sale and remits the same to gta. Will this attract Service tax reverse charge.
Kindly reply as soon as possible
He is not providing any service and working as pure agent. His main work is also trading so service tax will not apply.
What if the service is provided by GTA to a company & also he is charging Service tax in his invoice i.e. 4.20 % of freight.
Whether company needs to deposit service tax on reverse charge basis even if it has been paid by GTA & claimed from us in his invoice. ??
NO need to pay second time.But discuss the matter with GTA about RCM applicability.
Thanks Tarannumji for informative article.
I am proprietor of an SSI manufacturing unit whose clearance is below 150 lacs and hence not required to be registered under Central Excise Act. My proprietorship firm is registered under Service Tax for taxable service “Transport of goods by road/GTA u/clause (zzp) as a service receiver. I pay ST under RCM as I am paying freight to transporters. Until last year, my unit was a factory registered under the Factories and Boilers act.But due to latest changes in the Factories Act,my unit employing less than 20 workers is not a registered factory anymore, and so I have not renewed my Factories Act registration this year. Now my question is:
Whether I am still required to continue my ST registration given that my unit is no longer a ‘registered’ factory, and that I am an individual (Proprietorship firm)? Though, my online ST-1 & ST-3 show constitution of assessee as “others” and not as individual. What should I do? Please advise at the earliest. Thanks and best regards.
Change constitution of your business in service tax registration certificate and as individual, you are not liable to pay service tax under RCM. But you should wait for change in certificate for that.
Madam can u tell me the rate 4.20 calculating ex if frieht charges is 50000 how to ro divide 14% wat is the figer value for it 14 % 2% 1%
4.2 % is service tax. No education cess is required to add.
Very Crystal Clear explanation…Thanks for the information…
CA Srikanth
Thanks for appreciation
Hi, Thank you for such a fine explanation with examples. I have a query- If the GTA charges service tax on the invoice should the service receiver still pay service tax?
No, if RCM is applicable, service receiver is liable to pay service tax. However, if service provider has charged by mistake in bill ( when rcm is applicable) and service provider has paid, again there is no need to pay service tax via RCM.
GTA CAN ADD SERVICE TAX AMOUNT IN THE BILL…?????… IF IT IS DONE WHAT AMOUNT WE SHOULD PAY..???
If you are not covered under RCM, GTA will charge service tax in bill and it is completely ok.
thanks for providing use full information
Pleasure
Thanks for providing use full information of GTA
It is my pleasure that my article helps you and other readers of Tax Masala.
Anyone who read this article will start consultancy on thi subject. Thanks or useful article.
Thanks for appreciation.
Impressive knowledge…. Keep on writing madame.
Is RCM mandatory ??
Yes, it is mandatory.
thanks for such a nice explanation.
Completely exhausitive ma,am , really usefulll
Thanks riya. 🙂
Ma’am..in GTA…reverse charge concept is applicable or abatement concept..?
Reverse charge mechanism and abatement concept – Both are applicable for GTA service. Read article carefully, I have covered almost points.
When individual or HUF is availing GTA service and paying freight, they are not liable ?????????
When individual or HUF is availing GTA service and paying freight, they are not liable to pay service tax under reverse charge mechanism and good transport agency is liable to pay service tax on freight by charging in bill.
Thank You So Much For Sharing Such Valuable Information
It is my pleasure that my article helps readers.
I never read this type simple article on GTA… Very Very Nice
Thanks for appreciation. 🙂
Dear Mem,
I am a contractor Based from gandhidham, having a Business of Loading and unloading of Salt from Pan to Washery plant and from washery plant to hipping vide heavy equipments and Tractors, and also having labour, Driver and other Staff,
for the same i raise bill to a Ltd Company for the Transportaion of Salt from Stecking yard to Washery and other location on the basis of per Metric Tonne.
yet i dint raise bill with service tax.to the service receiving party. my question is whether service tax applicable on the same or not?
if applicable please guide or not applicable under which section or if you have any notification please provide the same.
If you are issuing consignment note, rules given in the article will be applicable to you. Reverse charge mechanism will also be applicable to your service. For service tax applicable to you, read my post https://taxmasala.in/small-service-provider-exemption/
Mam i(Individual) am paying freight to the extent of 5 Lacs to one of my family members. The family member is not providing any other services to anyone. My payment is his gross reciepts. is service tax liable to me or my family member? will i be covered under reverse charge?
maam,,,What about TDS in case of Transporter?
If GTA service provider is availing SSI exemption and he does not show service tax amount in bill and service receiver is a company . so plz tell me whether company is liable to pay service tax as per RCM
Yes, company is liable to pay S.Tax under RCM at 30% of value.
Proprietorship firm registered with Service tax department, STC issued on individual pan, if other taxable service provided in individual name which is below threshold limit of 10 lacs is taxable just because pan base stc issued for proprietorship firm
Aggregate value of all the services will be considered for tax ability. You cant get exemption of 10 lakhs for different services. Read my article https://taxmasala.in/small-service-provider-exemption/
(A ltd) company is supplying material to our company(BLtd). Material Value is Rs 1 lakh. In addtition to material value they are charging Freight of Rs 80000. They are charging Service tax of Rs 3480 (Rs 80000*30%*14.5%). Is the supplier’s billing method correct?
Can they charge Service tax of Rs 3480 in their bill.?
Is it necessary for us (ie B ltd) to pay Service Tax of Rs 3480 under Reverse charge Mechanism Basis?
Their billing method is wrong. S.Tax on 30% of value should be paid by your company under RCM ( directly) and they cant recover that amount from you via bill.
A Ltd is supplier. Hanuman Transport is issuing Consignment Note to A Ltd. A Ltd is liable to pay freight to Hanuman transport and pays to Hanuman Transport. We B Ltd has no connection with Hanuman Transport. Since our supplier ALtd paid to Hanuman Transport Rs 80000, he is reimbursing it from us Rs 80000 + ST @ 14.5%. In this case are we liable to pay ST RCM
We are a manufacturing company. Courier agency charges service tax in their bill.
Can we take cenvat credit of that service tax?
In what case we can take cenvat credit for courier bills? Regards Siva
What if under Rcm if I dont pay GTA within 6 months then what rate will be inforce and will cenvat get disallowed for inward service.
Dear Mam
If service providers not register in GTA. And he raised a fright invoice to his costumers then which amount he charge service tax gross value or 30% of gross value please resolve
Warm regards
Dear Ma’am,
We are transport service provider and we are giving transportation services to our client in Nepal and Bangladesh. We are transporting their material from India to Nepal and freight will also be paid by client in Nepal. As such, would request you to please let us know as who will be liable for service tax whether transporter or client. We are a partnership firm and registered under GTA.
What is rate of service tax in normal case.? if total freight is 150000/-. how service tax will be calculated.
I am a Trader & purchasing material from my Principals & material is coming through Transport company.They have started showing service tax on 30% of abatement as Total Payable by consignee.Value is less than Rs.100/-Please inform us whether we should pay service tax or is there any limit for exemption as I am not covered under any service contract & has not having any service tax registration.
Regards
i am transporter providing trasnporting of goods with in chattisgarh my gross receipts is less than rs 800000/- ( eight lacs ) whether i have to registered in service tax or not and kindly provide basic information which i have to keep in mind
We are bringing goods metal scrap from seaport Chennai to bangalore factory by road through our cfa , CFA is taking truck from different GTA but CFA is charging service tax in his bill from us. Is it correct ..? or deviation of service tax rule.
A Ltd is supplier. Hanuman Transport is issuing Consignment Note to A Ltd. A Ltd is liable to pay freight to Hanuman transport and pays to Hanuman Transport. We B Ltd has no connection with Hanuman Transport. Since our supplier ALtd paid to Hanuman Transport Rs 80000, he is reimbursing it from us Rs 80000 + ST @ 14.5%. In this case are we liable to pay ST RCM
Our Partnership firm is providing services which are exempted,but our firm is paying freight to transporters as,is firm liable to pay service tax under RCM.
If an individual situated in Delhi avail the services of GTA placed in Nepal and pay freight the what will the place of provision of service and who will be liable to pay service tax ?
Hi,
I need a clarification on GTA. If ABC Pvt Ltd takes the GTA service from a Registered Goods Transport Agent which is also a Pvt Ltd / Ltd Company say GATI or TCI, then in that case also we need to deposit Service Tax under Reverse Charge Mechanism. In the given case Service Provider (say GATI / TCI) is charging Service Tax from ABC Pvt Ltd.
I also like to bring your attention to Rule 2(B) of Service Tax Rule 1994 under which the Body Corporate is Covered.
‘A’ = GTA, ‘B’ = Custom House Agent opt the transport service from GTA and pay to the transporter and subsequently bill the transportation to his cusomer adding the profit, ‘C’ = Importer ultimate pay the Transportation charges to B.
Question : who is liable to pay the Service Tax
IF A COMPANY IS GETTING THE SERVICES OF TRANSPORTATION IN THE MANNER ONLY LOCAL TRANSPORTATION WITHIN THE CITY BUT NO CONSIGNMENT IS ISSUED by the transporter . : Q: What is binding applicable for Service Tax.
Good information .. detailed analysis..
Madam
Any service tax applicable for transportation of military canteen items (VAT shown against each Canteen stores department items in the invoice) , for sale with VAT bill for military persons and ex-service man. Here we are engaging with only transportation of canteen items (under GTA) from main Defence go-down to Defence unit run canteens . Purchases and sales done by defence canteens only.
Any service tax applicable for transportation of military canteen items (VAT shown against each Canteen stores department items in the invoice) , for sale with VAT bill for military persons and ex-service man. Here we are engaging with only transportation of canteen items (under GTA) from main Defence go-down to Defence unit run canteens . Purchases and sales done by defence canteens only.
Mam’ If any product received from Taxi and their is no builty in that case service tax applicable or not
Respected mam,
I am defence personal
I am sending my house hold items on posting or retirement to another place
If the freight charges 90000 on 45 quintol
What should be the method for calculate
Of service tax
Hello Madam,
Can you help me to fill up the form for ST 3 return as doing the business supply good one place another place and some of party paying the service tax on behalf and some of party paying 25% by me.
Kindly help me the form how to fill the form ST 3
madam,
i need clarification on service tax applicability on transportation of milk products by road?
Dear Mam, We are one of service provider in India to provide End to End services of import & export. Inland Transportation also part of it. Currently we are taking 3rd Party transportation service from market (Transporters) bcz currently we don’t have own fleet. Please note, we already registered in Carriage by Road Act 2007, MTO License basis of this we eligible to issue our own consignment note while goods transport as per Notification no. 26/2012 amended with notification no. 8/2015-st. But 3rd Party transporter also wants to issue their consignment note. In this case, what is the service tax implication on both. Please advise……
i am a contractor, I do work only govt department public road, we paid transportation charges to transporter for material transportation, Mam. Please give us solution for above can material transportation charges for road work is applicable in service tax for us, because road work is totally exempt in service tax
Hello Madam, A manufacturer of excisable goods and transports his goods in own vehicles upto the place of purchaser, not issuing any consignment note whether considered as transport agency by virtue of fact he is issuing invoice, whether is eligible for abatement of 70% freight charges? Please clarify.
Hello Madam, Incase of of a GTA providing service to a customer covered under RCM – Is it mandatory for the GTA to reflect the service tax amount on the invoice eventhough he does not collect the same- Further what records should he keep to satisfy service tax officials that the service tax has been paid by the recipient of the service.
Hi Mam,
If Service Tax invoice is received by GTA than is liable to pay amout with ST to Service Provider and he is also eligible to take credit of such amount?
Please clarify..
Sir,
Please confirm transporter service tax not registered and LR copy manson that service tax payable by consignor and consignee it’s true
And second, “transporter how many turnovers achieve that service tax regestatrion requre
Sarvesh Kumar
Dear Madam
You have cover nicely, but My point is I have Pvt. Ltd., In which I have received transport service last year one time Rs 6500/- by transporter, Transporter issued invoice and stated that service tax will be paid by consignee. In this case who have to pay service tax and in which account service tax to be pay, I have no service tax no
I am Running GTA service by road.From where can i get the detailed list of service tax exempted items ( supermarket item/ product wise list) for transportation by GTA by road
Hello maam , maam i want to say whether service tax under reverse charge is applicable in case we take service of gta for transport of goods from place of removal to port for export of goods and we are pvt ltd company
thanks Mem/SIR this information for GTA very good. today i use service tax rcm for my audit work
to the point and very well explained. 5 out of 5
Thanks a lot ankit..:)