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No tax on a slew of GTA services

NEW DELHI: The Government on Thursday announced service tax exemption for goods transport agencies (GTAs) engaged in ferrying goods by road for providing ancillary services like packaging, transhipment and warehousing, provided such services are not outsourced.

In a circular, the Central Board of Excise and Customs (CBEC) said: “If any ancillary, intermediate service is provided in relation to transportation of goods, and the charges, if any, for such services are included in the invoice issued by the GTA, and not by any other person, such service would form part of the GTA service and the abatement of 75 per cent would be available on it.”

The circular has been issued following the Government’s assurance last month to the All-India Motor Transport Congress (AIMTC), which had spearheaded a countrywide strike on the service tax issue as also the increase in the toll tax.

GTAs which provide road transport services, either by hiring trucks or their own vehicles, are liable to pay service tax on 25 per cent of the billing amount.

GTAs, however, had complained that tax officials were also demanding service tax on ancillary services such as packaging, temporary warehousing, loading and unloading which are provided by them as part of the transport services.

The CBEC has now made it clear that 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.

However, reacting to the CBEC circular, AIMTC President Charan Singh Lohara said: “We are not satisfied with the decision as the Finance Ministry has not included delivery agents, booking agents under the GTA service that was agreed in the written agreement signed by government officials and our association”.

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