Small is beautiful: No requirement of truck number for small consignments
On the above Board Clarification, I woke up a Service Tax expert last night and asked for his comments. This is what he sent me early in the morning:-
When Road Transport Agency Association represented to the Board expressing difficulty to comply with the provisions of Rule 4B of Service Tax Rules – which requires mentioning of registration number of goods carriage in which the goods are transported – in respect of small consignments as the GTA would not know the truck number at the time of booking of consignment, the CBEC vide Circular No.95/6/2007-ST dt. 11/06/2007 has given the following solution:
“Therefore, in respect of small consignments, where truck number is not known, an endorsement, i.e., “truck number not known” may be made on customers copy of consignment note, against the entry for truck No. As and when the truck No is known, the goods transport agency shall make an entry of trucks No. in their copy of consignment note to satisfy the requirements of said rule 4B and also for any future reference. Similarly, in case of transshipment of goods, the goods transport agency would make entry of such transshipment, in their copy of consignment note. For example, if goods moves from Delhi to Agra, and is transshipped there for further movement to Mumbai, the goods transport agency would mention in his copy of consignment note, against vehicle No. as “ (i) Delhi to Agra: Vehicle No.- XXX (ii)Agra to Mumbai: Vehicle No.- XXXX”. This would satisfy the requirement of the said rule 4B. “
If the GTA tries to implement the above solution, one day he may find that the solution given by CBEC is more complicated than the problem. If the whole problem is to satisfy the requirement of the rule (as felt by CBEC) then the GTA can put any truck number of his fleet. Person having even a cursory knowledge about the way GTA booking offices function would certainly laugh at the above solution, because the consignment note / LRs never seen to contain (filled) all details except consignee address and freight charges as these offices book number of consignments everyday and they are manned by not so literates, they hardly find time to follow niceties of law. In such a scheme of things is it possible for the person transshipping goods in Agra to inform his Delhi office to trace and enter transshipped truck number in the CN issued to “ small consignment “ booked at Delhi.
Thank god, the circular did not add that the GTA has to inform to consignor (who booked small consignment and got his CN copy filled as “truck number not known”) the truck number/ transshipped truck number, so that he can correct his copy accordingly.
It may be remembered that one of the reasons for opposing imposition of service tax on GTA agencies is that the GTA are run by illiterates or semi literates.
Further, if the above circular (solution) is meant for taking Cenvat credit without any problems at the consignee end, then it is enough if they “satisfy” the officer than the requirement of rule 4B
Instead of issuing the above non-workable solution, the Govt. may consider adding a proviso to rule 4B dispensing requirement of mentioning truck number in case of small consignments.