The Central Board of Excise and Customs, the Government of India, vide circular No. 186/5/2015-ST dated 05.10.2015, clarified the doubts raised by the All India Motor Transport Congress (AIMTC) regarding treatment given to various services provided by Goods Transport Agencies in the course of transportation of goods by road.

Goods Transport Agency ("GTA") has been defined to mean any person who provides service to a person in relation to transport of goods by road and issues consignment note, by whatever name called. In addition to transportation services, GTA also provides various ancillary services such as loading/ unloading, packing/unpacking, transhipment, temporary storage etc., which are provided in the course of transportation of goods by road.

The clarifications with regard to levy of service tax on such services provided by GTAs as provided in the Circular have been summarized as follows:

1. Various services provided by GTA in transportation of goods by road shall be treated as part of GTA service

The ancillary services may be provided by GTA himself or may be sub-contracted by the GTA. In either case, for the service provided, GTA issues a consignment note and the invoice issued by the GTA for providing the said service includes the value of ancillary services provided in the course of transportation of goods by road. These services are not provided as independent activities but are the means for successful provision of the principal service, namely, the transportation of goods by road.

2. Composite service need not be broken into its Components

A single composite service need not be broken into its components and considered as constituting separate services, if it is provided as such in the ordinary course of business. Thus, a composite service, even if it consists of more than one service, should be treated as a single service based on the main or principal service. While taking a view, both the form and substance of the transaction are to be taken into account.

3. Abatement of 70% to GTA services available to the entire composite services

If ancillary services are provided in the course of transportation of goods by road and the charges for such services are included in the invoice issued by the GTA, and not by any other person, such services would form part of GTA service, and, therefore, the abatement of 70%, presently applicable to GTA service, would be available on it.

4. Conditions for applicability of Abatement Notification

For the purpose of availing the abatement under Notification No. 26/2012-ST dated June 20, 2012 (S. No. 7), in cases where GTA undertakes to reach/deliver the goods at destination within a stipulated time, it should be considered as 'services of goods transport agency in relation to transportation of goods' under such notification only if:

a) The entire transportation of goods is by road; and

b) The GTA issues a consignment note, by whatever name called.

Apart from the above, the circular also clarifies that the pending disputes on the above issues shall be dealt with accordingly and expeditiously by the Department of Revenue.

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