Service Tax On Goods Transport Services
By: Ravi Holani
Date of the levy - The levy on the goods transport operators has been imposed by the Finance (No.2) Act 2004 w.e.f. 10-09-2004 but the levy has been postponed till the end of December 31,2004.
Meaning of Goods Transport Agency - Section 65 (50b) of the Finance Act 1994 lays down that 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.
The Service Provider shall be a Commercial Concern - The service provider shall be a commercial concern, and accordingly, an individual (i.e., a proprietorship firm) is outside the scope of the service provider, otherwise the legislature would have employed the term "any person" instead of "any commercial concern". The concern for taxability of specified services under this title shall be a commercial concern but whether such specified services are the business of such concern, is not the required condition.
By employing various words in definitions, the legislature has never intended that mere putting a signboard by an individual, such individual shall be treated a commercial concern. A signboard to indicate the name of the trader, i.e., the title of the trade, the nature of the trade, location or address does not convert an individual into a commercial concern. Tax is on the service provider by not linking the quantum of business of the trade. Merely on the basis of location, or by putting a signboard at his place, or by giving a title to the trade, or on account of the quantum of business, such individual, i.e., the proprietary business shall not be converted into a commercial concern.
The word "commercial concern" is a combination of two words- one is "concern" , which is associated by the word "commerce". It means a company registered under section 25 of the Companies Act, 1956; a charitable or religious trust or an educational institution, though these are a concern but because of the lack of profit oriented organization, these shall not be called as commercial concern. And for the word-concern at least, more than one beneficiary shall be required.
A reference could also be taken from Devilal Kutir Udyog v. CCE (127) ELT 143(T) read with (130) ELT A94.
Meaning of Taxable Service - Taxable service for that purpose means any service provided to a customer, by a goods transport agency, in relation to transport of goods by road in goods carriage - section 65(105)(zzp) of the Finance Act 1994.
Meaning of Goods Carriage - The term "goods carriage" as defined by section 2(14) of the Motor Vehicles Act, 1988 means.
"Goods carriage" means any motor vehicle constructed or adapted for use solely for the carriage of goods; or any motor vehicle not so constructed or adapted when used for the carriage of goods.
Meaning of Motor Vehicle - Motor vehicle or vehicle means any mechanically propelled vehicle adapted for use upon roads whether the power of population is transmitted thereto from an external or internal service and includes a chassis to which a body has not been attached and a tailor, but does not include a vehicle running upon fixed rails or a vehicle of special type adopted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding [twenty five cubic centimeters] - Section 2(28) of the Motor Vehicles Act, 1988.
http://www.manupatra.com contributed by Ravi Holani
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