MANU/DSTX/0049/2004

Ministry: Ministry of Finance

Department/Board:Central Board of Indirect Taxes and Customs

Instructions from File No.: 341/18/2004-TRU(Pt.)

Date: 17.12.2004

Notification/ Circulars Referred:35/2004 MANU/DSTX/0048/2004;32/2004 MANU/DSTX/0046/2004;12/2003 MANU/DSTX/0014/2003;33/2004 MANU/DSTX/0045/2004;34/2004 MANU/DSTX/0047/2004

Referred IN

Subject: Goods and Services Tax

Subject: Excise

To,

The Chief Commissioners of Central Excise and Service Tax,

The Director Generals,

The Commissioners of Central Excise and Service Tax,

The Commissioners of Service Tax,

Madams/Sirs,

Issues Pertaining to Levy of Service Tax on Goods Transport Agency

In the Budget 2004, it was proposed to levy service tax on services provided by a goods transport agency in relation to transport of goods by road.

2. For this purpose vide Finance (No.2) Act, 2004, a sub-clause (zzp) was inserted in clause 105 of section 65 of the Finance Act, 1994, defining taxable service as any service provided to a customer, by a goods transport agency, in relation to transport of goods by road in a goods carriage.

2.1 The definitions of goods carriage and goods transport agency were also provided by inserting clause 50a and 50b in the Finance Act, 1994 as follows:

(50a) goods carriage has the meaning assigned to it in clause (14) of section 2 of the Motor Vehicles Act, 1988; and

(50b) goods transport agency means any commercial concern which provides service in relation to transport of goods by road and issues consignment note, by whatever name called.

3. In pursuance to an agreement dated 27th August, 2004 between the Government and representatives of the transport industry, a Committee was set up to look into appropriate mechanism/modalities for collection and payment of service tax. It was instructed vide letter issued from F. No. B2/8/2004-TRU dated 10.9.2004 that no tax would be payable by the goods transport agency till such time the Government comes out with the relevant rules/ notifications prescribing the modalities for levy and collection (refer pa........