Budget 2015-16 Changes in Service Tax on Goods Transport Agency (GTA)

Budget 2015 has a few amendments with respect to existing exemptions and abatements. Entry no.21 of item (d) of mega exemption notification no.25/2012 has been amended to restrict the scope of exemption on GTA services. The details are as follows:
SI. No. Exemption given upto 31.03.2015 Exemption from 1st April 2015
1 Foodstuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil, excluding alcoholic beverages Milk, salt and food grain including flours, pulses and rice
By amending the above entry, exemption has been restricted only for Milk, Salt and food grain including flours, pulses and rice transported. For other goods like food stuff, tea, coffee, jaggery, sugar, milk products, edible oil and alcoholic beverages no exemption would be available. When such goods are transported, the same would be liable for service tax after availing the abatement under Notification no.26/2012-ST in the hands of service recipient or provider as the case may be.
Apart from this, amendment has been made to entry no.7 of Notification No.26/2012 wherein the abatement has been reduced to 70% from 75% resulting in increase of liability of service tax from 25% to 30% of the service value. This change is effective from 01st April 2015.
Goods transport agency service provided for transport of export goods by road from the place of removal to an inland container depot, a container freight station, a port or airport is exempt from service tax vide notification No. 31/12-ST dated 20.6.2012. Scope of this exemption is also widened to exempt such services when provided for transport of export goods by road from the place of removal to a land customs station.This change is effective from 01st April 2015.

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