TMI BlogGoods Transport by Road - Confusions - Classification of Composite ServicesX X X X Extracts X X X X X X X X Extracts X X X X ..... Goods Transport by Road - Confusions - Classification of Composite Services - Commentaries / Editorials Dated:- 7-8-2008 - News - As on 2-7-2008, Shri V. Sridhar, Member of CBEC has briefed the media, assured AIMTC that their concern with regard to applicability of Service tax and difficulties related thereto shall be examined and suitable clarification shall be issued in consultation with AIMTC. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Now, CBEC has issued a circular [ Circular No. 104/ 07 /2008-ST dated 6-8-2008 ] , to clarify three sensitive and most important issues. These clarification may be summarized as under: 1. The composite service provided by the transporter shall be classified as GTA service irrespective of mode of billing. 2. Where transporter undertakes the job or packing along with the transportation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods, the same shall be classified as GTA service. 3. Delivery of time sensitive goods if transported by road under a consignment note shall be classified as GTA service. It seems that the Board has moved in the right direction but with wrong procedure. As per the provision of Chapter V of the Finance Act, 1994 , the services related to "Cargo Handling Service" and "Courier Service" are v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery specific services. Section 65A provides specific provisions for classification of services. Section 65A further specified that in case a service is likely to fall within more than one category, it shall be classified within the first category. The nomenclature of taxable services (as referred above) is as under: Sr. Code Clause Service Effective Date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 005 65(105)(f) Courier 01-11-1996 038 65(105)(zr) Cargo Handling 16-08-2002 061 65(105)(zzp) Transport of goods by road 10-09-2004 A careful analysis of the above stated provisions reveals that the circular is not in accordance with the correct legal position. In view of this the following situation may arise: 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether a circular issued by the Board is binding upon revenue: The answer is obviously yes. Section 37B of Central Excise Act, 1944 (as extended to Service Tax) empowers CBEC to issue instruction to officers regarding uniformity of Classification. Therefore, the above circular may be said as within the powers of the Board. A circular which is within the powers of the board is bind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing upon the revenue officers. In COLLECTOR OF C. EX., VADODARA Versus DHIREN CHEMICAL INDUSTRIES reported in 2007 -TMI - 1709 - SUPREME COURT OF INDIA , honorable Supreme Court held that, "We need to made it clear that, regardless of the interpretation that we have placed on the said phrase, if there are circulars which have been issued by the Central Board of Excise and Customs which place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a different interpretation upon the said phrase, that interpretation will be binding upon the Revenue." 2. A warm welcome from the transporters It is felt that the transporter would be happy after this clarification because, the major difficulty has been removed by the CBEC. Now, they can discharge their service liability more efficiently and effectively. 3. A warm welcome fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the service recipients who are not availing CENVAT Credit. In the situation after this circular, the service tax liability if just 25%, the net burden of service tax is bound to be reduced after the clarification. 4. Service Recipients eligible to avail CENVAT credit may challenge this circular in the Court. It is a bad news to the persons who are eligible to avail CENVAT credit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n input services. Availing Credit of service tax paid on Courier Service and Cargo Handling Service is not much difficult, but availing Credit of service tax on GTA service is restricted. Therefore, a service recipient, who bears the loss due to not availability of CENVAT Credit after this circular, may challenge the validity of this circular before the appropriate court. - News - Press release ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - PIB Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
