18 February 2010
Whether liability of paying service tax is on the receiver in case of goods transport by road even if the transporter has Service Tax Registration Number.
19 February 2010
The status of the reciver determines whether tax is payable by the reciver of r the GTA.. However you may like to diffrentiate between a GTO ( owner/operator) who are not liable and GTA ) booking agent) whose actiovity is liable.
19 February 2010
i do not understend what r u saying? Can u please explain it once again in simple way i.e., if a transporter who is registered under service tax under GTA but while giving builty he does not claim service tax and we (receiver of service(company)) are liable to pay service tax or not?
26 July 2024
Certainly! Let's break down the scenario of Goods Transport Agency (GTA) services and service tax liability under the reverse charge mechanism (RCM) in simple terms:
### **Understanding the Liability under Service Tax for GTA Services**
**1. **Who is Responsible for Paying the Service Tax?**
- **Service Provider (GTA)**: The Goods Transport Agency (GTA) is the service provider. In a typical situation, the service provider (GTA) is responsible for collecting and paying the service tax to the government.
- **Reverse Charge Mechanism (RCM)**: Under the reverse charge mechanism, the responsibility to pay the service tax shifts from the service provider to the service recipient (i.e., the company receiving the transport service).
**2. **Scenario Explanation**
**a. **GTA Service Registration**
- **Registered GTA**: If the transporter (GTA) is registered for service tax, they are authorized to collect and remit service tax on the transport services provided.
**b. **GTA Invoice Without Service Tax**
- **Service Tax Not Claimed**: If the transporter issues a bill (billed as “freight charges”) without claiming service tax, it means they are not charging service tax on the invoice.
**c. **Receiver’s Liability**
- **Receiver's Responsibility**: Even if the GTA does not claim or charge service tax on the invoice, **the liability to pay service tax still lies with the receiver of the service** under the reverse charge mechanism.
### **Key Points to Remember**
1. **Reverse Charge Mechanism (RCM)**: - Under RCM, the receiver of the service is responsible for paying the service tax, even if the service provider (GTA) does not charge it.
2. **Service Tax Registration**: - The GTA having a Service Tax Registration number does not impact the receiver’s liability. The GTA’s registration is a requirement for their operations, but it doesn’t change the fact that the receiver must pay service tax under RCM.
3. **Invoice and Documentation**: - **No Service Tax Charged**: If the GTA does not charge service tax on their invoice, you (the receiver) still need to calculate and pay the service tax on the value of the service received. - **Pay and Report**: The receiver must report and pay the service tax in their own service tax returns.
4. **How to Handle It**: - **Self-Assessed Tax**: You (the receiver) should determine the service tax amount based on the value of the service and pay it directly to the government. - **Claim Input Credit**: If you are registered under service tax, you can claim input credit for the service tax paid under reverse charge.
### **Example to Illustrate**
- **Transporter (GTA)**: Provides transportation service and issues a bill for ₹10,000 but does not mention service tax.
- **You (Receiver)**: - **Service Tax Calculation**: You need to calculate the service tax (e.g., 12% of ₹10,000 = ₹1,200) and pay it to the government. - **Record and Report**: Record the transaction, pay the service tax, and include it in your service tax return under RCM.
### **Summary**
- **Responsibility**: Under reverse charge, the liability to pay service tax lies with the receiver of the goods transport service, even if the GTA does not charge it. - **Action Required**: The receiver should pay the service tax directly to the government and report it in their service tax returns. - **GTA Registration**: The GTA’s service tax registration does not affect this liability.
By understanding these points, you can ensure compliance with service tax regulations when receiving goods transport services.
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