The Finance Ministry today said ancillary services provided in the course of transportation of goods by road are eligible for 70 per cent abatement as in the case of Goods Transport Agency (GTA), on a day transporters called off their 5-day nationwide strike.
The Central Board of Excise and Customs (CBEC) has issued the clarification in response to issues raised by All India Transport Welfare Association (AITWA) and All India Motor Transport Congress (AIMTC).
"...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 per cent, presently applicable to GTA service, would be available on it," the CBEC circular said.
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Seventy per cent abatement means service tax is to be paid on only 30 per cent of the value.
CBEC said AITWA had made representation to the revenue department regarding the difficulties being faced by the GTAs in respect of service tax levy on the services of goods transport.
Doubts were also raised by the AIMTC regarding treatment given to various services provided by GTAs in the course of transportation of goods by road.
CBEC said 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. The guiding principle is to identify the essential features of the transaction," it added.
