Availment of exemption under Notification No.34/2004 ST – DGST's clarification
DGST received a reference from the Commissioner, Central Excise & Customs Indore, seeking clarification on the availment of Notification No.34/2004 ST dated 03.12.2004 in respect of individual consignments transported by road by the Goods Transport Agency.
The officers of Central Excise, Indore Commissionerate noticed during the course of audit that service providers were availing of exemption from service tax in respect of individual consignments when freight amount did not exceed Rs.750/- even if the total freight of all consignments in a goods carriage was higher than Rs.1500/-. They were of the view that the exemption under clause (ii) of the Notification No.34/2004 ST dated 03.12.2004 was applicable only when a goods carriage transport consignment consisting of one or more consignments (packages) meant only for a single consignee and if the total freight for all their consignment meant for the only consignee was more than Rs.750/-, the exemption was not available under the said notification.
DGST examined the issue and is of the view that as per clause (i) of the said notification, if by a truck /carriage consignments were transported whose total freight did not exceed Rs.1500/-, then it will qualify for availment of the benefit of the notification supra irrespective of the freight charges of the individual consignments; and as per clause (ii) of the said notification, the freight amount in respect of a individual consignment being transported by a truck/carriage should not exceed Rs.750/- for the availment of the benefit of the notification supra, irrespective of the number of such individual consignments transported by a carriage and irrespective of the total combined freight amount charged in respect of all such consignments being in excess of Rs.1500/-. DGST is of the view that the two clauses of the notification provided two independent exemptions on account of the fact that these clauses have been separated by the word 'or' and not by 'and'.
DGST's above views were also communicated to Board vide letter of even number dated 31.07.2008 for clarification and it informs the field formations that the Board has confirmed /accepted these views vide endorsement dated 11.8.2008 made on the copy of said letter.