NEW DELHI, November 7: The government has decided to bring into effect the service tax in relation to transport of goods with effect from November 16,1997. The tax will be payable in respect to the service rendered for transport of goods by road to factories established by or governed under the factories Act 1948; to companies established by or under the Companies Act, 1956; to corporations; to societies registered under the Societies Registration Act,1860 or under any other law; to co-operative societies; to any dealer of excisable goods who is registered under the Central Excise Act,1944 or the rules made thereunder; to any other body corporate established by or under any other law and to persons who are sales tax assessees and whose turnover exceeded Rs 50 lakh during the previous year.

It has been provided in the service tax rules that the responsibility for payment of service tax shall lie with the above categories of persons. Further they will be liable to pay service tax at the rate of 5 per cent on the gross amount charged including the freight but excluding the insurance charge by the transporter from them for transporting the goods. The service tax will be payable when such cost of transportation is borne by the above mentioned categories of persons either as a consigner or as a consignee and when such charges are borne by them directly or indirectly.

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