TRANSPORTATION OF GOODS UNDER NEGATIVE LIST

[Dr. Sanjiv Agarwal]

Clause P of 66D of Finance Act, 1994 provides for the following entry in Negative List -

Services by way of Transportation of Goods-

(i) by road except the services of-

(A) a goods transportation agency; or

(B) a courier agency;

(ii) by an aircraft or a vessel from a place outside India upto the customs station of

clearance in India; or

(iii) by inland waterways;

The following services provided in relation to transportation of goods are specified in the negative list. Services:-

• by road except the services of (i) a goods transportation agency; or (ii) a courier agency
• by aircraft or vessel from a place outside India to the customs station of clearance in India; or
• by inland waterways.

Section 65B defines the following terms -

• Goods transport agency (clause 26)
• Courier agency (clause 20)
• Aircraft (clause 7)
• Vessel (clause 53)
• Customs station (clause 21)
• India (clause 27)
• Inland waterways (clause 29)

All services provided by goods transport agency are excluded from the negative list. However, there are separate exemptions available to the services provided by the goods transport agency.

These are services by way of transportation of –

• fruits, vegetables, eggs, milk, foodgrains or pulses, rice and cotton in a goods carriage;
• goods where gross amount charged on a consignment transported in a single goods carriage does not exceed one thousand five hundred rupees; or
• goods where gross amount charged for transportation of all such goods for a single consignee in the goods carriage does not exceed rupees seven hundred fifty.

The provisions relating to reverse charge, i.e. service tax is liable to be paid by the consigner or consignee in specified cases, are applicable even after the introduction of negative list.

CBEC has clarified vide Letter No. 334/1/2012-TRU dated 16.03.2012 as follows –

Nature of service relating to transportation of goods	Whether covered in the negative list entry?
By railways	No
By air within the country or abroad	No
By a vessel in the coastal waters	No
By a vessel on a national waterway	Yes
Services provided by a GTA	No

The negative list would also cover transportation of goods by road in a carrier such as by taxi, cab, three wheeler tempos, bus or other mode not generally meant for goods.

Specific abatements are allowed in relation to GTA services (75%) and transport of goods in a vessel (50%) from one port to another vide Notification No. 26/2012-ST dated 20.06.2012.

Services provided as agents for inland waterways are not covered by this entry. These are in the nature of services used for providing the negative list entry service of transport of goods on inland waterways and would not be covered by application of the rule for interpretation where services are specified by way of description contained in clause (1) of section 66F of the Act.