Service Tax on Transportation of Goods by Railway

1. Definition

As per Section 105(zzzp), Taxable Service means services provided or to be provided to any person in relation to transport of goods by rail.

2. Abatement

a) Notification no 26/2012-Service Tax  permits abatement from gross amount charges for determining the value of taxable service for services of transport of goods by rail. The transportation of goods by railway whether government or private will be covered under this notification.

b) The abatement of 70% of the gross value charged is permitted as per this entry. Hence, the service tax is charged on balance 30% of the gross amount.

3. CENVAT Credit

The service provider is entitled to the credit of -

a) Excise duty paid on inputs and capital goods     AND

b) Service tax paid on input services.

 

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