As per Section 65B (25) of Finance Act,1994; “goods” means every kind of movable property other than actionable claim and money; and includes securities, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale;
As per Section 65B (26) of Finance Act,1994; “goods transport agency” (GTA) means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called;
From the above definition of goods transport agency, we can see that any service provided in relation to transport of goods by road is liable to service tax. The words “in relation to” in the definition make it clear that this service includes not only transportation, but other services like loading, unloading, packing, unpacking and any other service related to transportation of goods.
It is also said in the above definition that the service provider must issue a consignment note to the service receiver. A consignment note is a printed document issued by the GTA which is serially numbered, has the names of the consigner & consignee, details of goods being transported, details of place of origin & destination, registration number of the vehicle in which the goods are going to be transported and the name of the person who is liable for paying service tax (either consigner, consignee or the GTA). If consignment note is not issue then penalty of Rs. 10000/- can impose on the GTA as per the provisions of Section 77 of Finance Act, 1994.
Services of transportation of goods by road is taxable only when service is provided by a goods transport agency or a courier agency.
All other types of service providers providing similar kind of service are not liable to service tax as they are included in the Negative List.
As per Section 66D (P) following services of transportation of goods is exempt from service tax-
If transportation of good –
i) By road except the service of
a) A goods transportation agency;
b) A courier agency
ii) By an aircraft or a vessel from a place outside India to the first customs station of landing in India,
iii) By inland waterways
Is chargeable under reverse charge mechanism?
As per Section 68(2) of the Act, the Central Government can notify certain services, on which liability to pay service tax can shifted to the service recipient. This is known as the Reverse Charge Mechanism (RCM). Notification No. 30/2012-Service Tax provides the portion of service tax to be payable by the service provider & service recipient. In case of services provided by or agree to provided by a goods transport agency in respect of transportation of good by road is fully payable by person receiving the service.