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Service tax in case of Goods Transport Agency (GTA)

Service tax in GTA

  • Anyone who provides the service of transportation of goods from one place to another via road and also issues a consignment note would be called by the name of Goods Transport Agency.
  • In 1997, the finance act levied service tax on all the goods importers but it was withdrawn later due to revolts. However, service tax was made compulsory from 01.01.2005.
  • The details of GTA service is given under notification no. 30/2012.  According to this notification, every person liable to pay the service tax must pay it and abatement is to be considered.The abatement for GTA service as given under notification no. 26/2012 Dated 20.06.2012 as amended from time to time is 70% and therefore 30% of service tax is liable to be paid. In fact, the abatement ratio has been amended vide notification no.8/2015 dated 1st March 2015 and the change of abatement from 75% to 70% is w.e.f.1st April 2015. The said abatement is eligible subject to the conditions as amended in the said notification. The extract of the condition is depicted below for reference –
  • According to service tax rules, the person liable to pay the freight for the transport of goods has also been liable to pay service tax. In case, the person liable to pay freight is in a nontaxable area, the person liable to pay service tax would become the service provider.
  • The taxable service provided by the GTA is exempted from the whole of service tax under a certain provision-
  • Gross amount of the goods transported does not in any way exceed the amount of one thousand five hundred
  • The gross amount on an individual consignment transported in a carriage does not exceed seven hundred fifty.
An individual consignment refers to all the goods transported in a goods carriage for a single consignee.

This article has been contributed by Simmi Setia, Content Writer at LegalRaasta, an online portal for GST Software, GST Return Filing, GST Registration, Section 8 Company Registration, Nidhi Company Registration, IEC Registration, Fssai License, File ITR Online.

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