Service tax on goods transport agencies -- a Budget announcement kept in abeyance after the truckers' strike in September -- will now come into effect from January 1, 2005 with certain modifications.

A notification issued on Friday said service tax will be levied on 25 per cent of the gross amount charged from the customer. Transportation of fruits, vegetables, eggs or milk will not attract any service tax.

Service tax will also not be levied if the gross amount charged on all consignments transported in goods carriage is not more than Rs 1500. For individual consignments, the limit has been set at Rs 750.

Persons making payments towards freight will be liable to pay service tax in case the goods are transported from a factory registered under the Factories Act, companies under the Companies Act and a corporation established under any law.

Also goods transported from registered societies, cooperative societies, excisable goods under central excise will attract service tax. The tax is to be paid by goods transport agencies.