Service Tax Circular No. 104/07-2008 dated Aug. 6, 2008 regarding Service Tax on Goods Transport Agency (GTA)

NO.CLE/POL/CIRCULAR/2008

August 27, 2008

Members of the Council.

Sub :Service Tax Circular No. 104/07-2008 dated Aug. 6, 2008 regarding Service Tax on Goods Transport Agency (GTA)

Dear Member,

As members are aware, the Union Budget 2008-09 provided exemption from Service Tax to the extent of 75% of the gross amount charged as freight for services of a goods transport agency (GTA) in relation to transport of goods by road in a goods carriage. This was notified by the Department of Revenue, Ministry of Finance vide Service Tax notification Nod 13/2008-Service Tax (copy enclosed at Annexure – I). This exemption came into effect from March 1, 2008.

The Department of Revenue has now issued a Service Tax Circular NO. 104/2008 dated Aug. 6, 2008 (copy enclosed at Annexure – II) wherein clarifications has been issued on GTA services, the details of which are summarized below.

-        If the Goods Transport Agency (GTA) offers any intermediate/ancillary service like loading/unloading, packing/unpacking, transshipment, temporary warehousing etc., in relation to transport of goods by road as a composite service and the charges for the same are included in the invoice of GTA, then such  intermediate/ancillary services will also be eligible for the service tax to the extent of 75% of the gross amount charged as freight for services of a goods transport agency (GTA).

-        Where service is provided by a person who is registered as GTA service provider and issues consignment note for transportation of goods by road in a goods carriage and the amount charged for the service provided is inclusive of packing, then the service shall be treated as GTA service and not cargo handling service.

-        Regarding classification of GTA service, so long as the entire transportation of goods is by road and the person transporting the goods issues a consignment note, it would be classified as ‘GTA Service’.    

Member exporters may kindly note the above.

Regards

Elangovan K
Executive Director
COUNCIL FOR LEATHER EXPORTS

 

Notifications/Circulars