This Tax Alert summarizes Circular No. 186/5/2015 dated 5 October 2015 issued by the Central Board of Excise and Customs (CBEC) clarifying issues in respect of levy of Service tax on services provided by Goods Transport Agency (GTA).
CBEC has clarified that ancillary services such as loading/ unloading, packing/unpacking, transshipment, temporary storage etc., are not provided as independent activities but are the means for successful provision of the principal service of transportation of goods by road. It should be treated as a single composite service based on the main service. Therefore, abatement of 70%, applicable to GTA service, would also be available to the ancillary services.
It was further clarified that in cases where the GTAs undertake to deliver goods within a stipulated time, the same will be considered as services of GTA in relation to transportation of goods and would therefore be eligible for the abatement of 70%.