FAQ on GTA – Goods Transport Agency

Frequenty Asked Questions on GTA – Goods Transport Agency

FAQ on GTAQUE. What is the effective date of levy?

ANS. 01-01-2005

QUE. Any goods based exemption?

ANS. Transportation of fruits, vegetables, eggs and milk, pulses and cereals (33/2004)

QUE. Any value based exemption?

ANS. As per not. 34/2004 Gross amount of consignments in a goods carriage<= 1500

Or

Individual consignment/carriage/consignee<=750

QUE. Two consignments worth Rs. 400 each are sent in a carriage of same consignee. Is tax applicable and on what amount?

ANS. Yes, on Rs. 800(practically difficult)

QUE. Consignments < Rs. 750 are transported totaling to Rs. 10,000 in a carriage? Is tax applicable?

ANS. No. Though the limit of Rs. 1500 is crossed, if consignment (s) per consignee < Rs. 750 then benefit of not. 34/2004 can be claimed.

QUE. When will 1500 exemption operate?

ANS. In a case where the gross freight of a single consignee is < 1500. This is intended to give relief to small distance transportation (local)

QUE. Who is person liable to paytax?

ANS. Unless specified otherwise GTA is liable to paytax.

QUE. When is receiver liable to paytax?

ANS. As per notif. No. 35/2004, if the consignor or consignee is from one of the specified categories (1/7 ) like Factory, Company, Corporation, Registered Society, Cooperative Society, Registered Excise Dealer,

partnership. Then any person who Pays or is liable to pay freight is liable to paytax. This is done by amending Rule 2(1).

QUE. Please clarify when GTA is not liable?

ANS. If Consignor/consignee is from 1/7 , Then GTA is NOT LIABLE at all Here person making payment or liable to payfreight is liable even though he is not from 1/7.

QUE. Can a forced GTA pay service tax to GTA and shift his liability?

ANS. No, A statutory liability cannot be shifted. However a general recourse can be taken under the letter dated 17th Dec 2004 issued by TRU.

QUE. What is the rate of tax?

ANS. 12.36% (incl. Education cess). However Notif. No 13/2008 exempts 75% of the gross amount charged. Thus effective rate = 3.09%

QUE. Is any credit on input services to GTA available?

ANS. No

QUE. What is the tax rate in case of liability of a person other than GTA?

ANS. 3.09 %, since the notification is a value based exemption and not person based. The notification exempts taxable service above 25% of gross amount and not a GTA.

QUE. Registration is required in how many days?

ANS. Rule 4(1) every service provider is liable to register within 30 days from commencement of business or taxability of category whichever is later.

QUE. Is every GTA required to be registered?

ANS. No, Only those agencies, which are liable to pay tax.

QUE. Is it mandatory to issue consignment note

ANS. Yes, as per Rule 4(B), except where taxable service is wholly exempted eg milk.., or <750/1500.

QUE. What are the requirements of Consignment note?

ANS. Explanation to Rule states that it means a document, issued by a goods transport agency against the receipts of transport of goods byroad in a goods carriage. It should be serially numbered, and should contain the following:

  • Name of the consignor and consignee.
  • Registration No. of the goods carriage .
  • Details of the goods transported.
  • Details of the place of origin and destination.
  • Person liable i.e consigner / consignee/GTA.

QUE. Is issue of Invoice mandatory even if GTA is not liable to pay tax and issue consignment note?

ANS. Yes, as per Rule 4A (1) every service provider shall issue invoice, bill, challan within 14 days of receipt of payment or completion of service which is earlier.

However proviso to Rule 4B exempts GTA from issuing consignment note where it is wholly exempted from tax.

QUE. Can Cenvat be utilized by a forced GTA for payment of service tax?

ANS. No, Cenvat credit can be utilized only for making payment of output service. Since this is not tax on output service, hence no credit is allowed.

QUE. Are any immunities granted to GTA ?

ANS. As per letter no. F.341/18/2004-TRU dt. 17th Dec 2004, on bonafide procedural lapses till 31st Dec 2005, no penalties will be leviable.

Also no vehicle will be stopped enroute or any enquiries raised unless authorized by Commissioner or a

higher rank.

QUE. Mr. A is engaged in the business of carrying passenger by buses as well as also carrying goods. will A be held liable for service tax?

ANS. Technically speaking, yes.

QUE. What is the liability when consignment note(s) of other GTA are used and only commission is earned?

ANS. Liability will be under Business Auxiliary Services w.e.f. 1-7-2003.

QUE. Can a forced GTA claim benefit under the 10 lac exemption?

ANS. No, the proviso to the notification denies the same.

QUE. Can GTA claim benefit under the 10 lac exemption?

ANS. Yes, provided his taxable turnover is within 10 lakhs.

QUE. On what amount service taxis payable?

ANS. Only on the value of taxable service provided by the transporter.

QUE. Can Cenvat credit be taken on the basis of GAR-7

ANS. No, but on the basis of challan, invoice etc showing the amount of service tax.

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7 Responses to “FAQ on GTA – Goods Transport Agency”

  1. bhavik patel
    July 23, 2013 at 12:07 pm #

    If service recipient in case of goods transport agency is individual or proprietorship and freight has been paid by the service recipient, than who is liable to pay service tax?

    • thesanyamjain
      July 25, 2013 at 10:45 pm #

      In your case service provider is liable to pay service tax.

  2. Durgaprasaddr
    March 30, 2013 at 4:39 pm #

    what is new notification exempts 75% of the gross amount from 1st july 2012

    • thesanyamjain
      March 31, 2013 at 1:58 am #

      Exemption from service tax is being provided to the extent of 75% of the gross amount charged as freight for services provided by a goods transport agency (GTA) in relation to transport of goods by road in a goods carriage, unconditionally.

      For better understanding refer:
      http://220.227.161.86/9992395-400.pdf

  3. Murali
    March 8, 2013 at 12:47 pm #

    Nice article

    • thesanyamjain
      March 8, 2013 at 2:33 pm #

      Thnx for liking…. :)

  4. thesanyamjain
    May 16, 2013 at 8:43 pm #

    Thnx for liking… stay tune for more updates…

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