Liability on gta if services is provided to an individual
This query is : Resolved
09 July 2012
Earlier, in case if GTA is providing services to a specified person, then the tax is payable by the consignor or consignee whoever is liable to pay the freight. and in case of non-specified persons, i.e. individual and HUF, GTA is liable to pay the service tax.
My query is, after Notification No. 15/2012, is it so that GTA is not liable to pay tax at all?? Even in case if services is provided to non-specified persons i.e. individual and HUF???
My query is, after Notification No. 15/2012, is it so that GTA is not liable to pay tax at all?? Even in case if services is provided to non-specified persons i.e. individual and HUF???
09 July 2012
Under reverse charge mechanism, the GTA service is to be paid by the service recipient only. GTA need not pay even if it is meant for non-specified persons. Think it over the following case. GTA is an individual, consignor is an individual or firm and consignee is also an individual or Firm and the freight amount is 1,20,000/=
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09 July 2012
Sir, as per my knowledge, in this case then, the GTA will bear the tax even if he is an individual because the condition of being a specified person lies on the consignor or consignee whoever is paying the freight. But, since the consignor and the consignee both are individual and both are non-specified, the tax burden lies on GTA.
Please correct me sir.
Please correct me sir.
10 July 2012
Good thinking. But, the GTA, being an individual, he will not come under the purview of tax net if he declares in the LR/Waybill by affixing a rubber stamp that "service tax will be paid by consignor/consignee" as the case may be. Because under reverse charge mechanism, the liability is shifted 100% to SR.
11 July 2012
Sir, what if GTA is a company (specified person) and providing services to individual (non-specified person)??? Now in this case, is the individual, being a non-specified person liable to pay the tax?? Whose liability will it be? GTA (SP) or individual (SR)
02 August 2024
In the context of Goods Transport Agency (GTA) services, the liability for paying service tax can indeed be nuanced. Here’s a breakdown of how the liability works:
### **Understanding the Liability in GTA Services**
1. **GTA Services Overview:**
- GTA services typically involve the transport of goods by road and fall under the purview of service tax (now GST).
- The general rule is that the liability for service tax on GTA services can fall on either the provider (GTA) or the recipient (typically the service receiver), depending on their status and the nature of the transaction.
2. **Liability when GTA is a Company (Specified Person):**
- **Specified Person:** Under the service tax regime, a specified person for GTA services refers to a person who is a company, partnership firm, or any other entity that provides GTA services.
- **Individual (Non-Specified Person):** If the service receiver is an individual and not a specified person, the responsibility to pay the service tax on GTA services could be different.
### **Liability under Service Tax Regime (Before GST):**
- **Reverse Charge Mechanism (RCM):**
- Under the service tax regime, if the service receiver is a specified person and the GTA is a specified person, the liability to pay service tax was generally on the GTA under the forward charge mechanism.
- If the service receiver was a non-specified person (e.g., an individual), the service tax liability fell on the service provider (GTA) and not on the individual.
### **Liability under GST Regime:**
Under GST, the reverse charge mechanism (RCM) applies differently:
- **GTA Services:**
- **If the GTA is a specified person (e.g., a company):** The liability to pay GST is generally on the service recipient if the recipient is a specified person (e.g., a business or partnership firm) and the GTA is not covered under the reverse charge.
- **If the recipient is an individual (non-specified person):** In the case where the service receiver is an individual, the GTA (service provider) would be liable to pay the GST, not the individual.
### **Summary of Liabilities:**
1. **Service Tax Regime:**
- **GTA (Specified Person) to Individual (Non-Specified Person):** GTA (service provider) is liable to pay service tax.
- **Reverse Charge Mechanism:** Applies if the recipient is a specified person.
2. **GST Regime:**
- **GTA (Specified Person) to Individual (Non-Specified Person):** The GTA (service provider) is responsible for paying GST.
### **Recommended Steps for Compliance:**
1. **GTA Services Provided to an Individual:**
- **Check the Nature of Service:** Verify if the service receiver qualifies as a specified person under GST or service tax regulations.
- **GTA’s Responsibility:** If the receiver is an individual, ensure that the GTA complies with their obligation to pay GST/service tax.
2. **Document and Compliance:**
- **Maintain Proper Documentation:** Keep all invoices and records related to the service to ensure proper compliance.
- **File Returns Accurately:** Ensure that GST/service tax returns reflect the correct payment and liability details.
By adhering to these guidelines, both the service provider and receiver can ensure compliance with the applicable tax regulations.
### **Understanding the Liability in GTA Services**
1. **GTA Services Overview:**
- GTA services typically involve the transport of goods by road and fall under the purview of service tax (now GST).
- The general rule is that the liability for service tax on GTA services can fall on either the provider (GTA) or the recipient (typically the service receiver), depending on their status and the nature of the transaction.
2. **Liability when GTA is a Company (Specified Person):**
- **Specified Person:** Under the service tax regime, a specified person for GTA services refers to a person who is a company, partnership firm, or any other entity that provides GTA services.
- **Individual (Non-Specified Person):** If the service receiver is an individual and not a specified person, the responsibility to pay the service tax on GTA services could be different.
### **Liability under Service Tax Regime (Before GST):**
- **Reverse Charge Mechanism (RCM):**
- Under the service tax regime, if the service receiver is a specified person and the GTA is a specified person, the liability to pay service tax was generally on the GTA under the forward charge mechanism.
- If the service receiver was a non-specified person (e.g., an individual), the service tax liability fell on the service provider (GTA) and not on the individual.
### **Liability under GST Regime:**
Under GST, the reverse charge mechanism (RCM) applies differently:
- **GTA Services:**
- **If the GTA is a specified person (e.g., a company):** The liability to pay GST is generally on the service recipient if the recipient is a specified person (e.g., a business or partnership firm) and the GTA is not covered under the reverse charge.
- **If the recipient is an individual (non-specified person):** In the case where the service receiver is an individual, the GTA (service provider) would be liable to pay the GST, not the individual.
### **Summary of Liabilities:**
1. **Service Tax Regime:**
- **GTA (Specified Person) to Individual (Non-Specified Person):** GTA (service provider) is liable to pay service tax.
- **Reverse Charge Mechanism:** Applies if the recipient is a specified person.
2. **GST Regime:**
- **GTA (Specified Person) to Individual (Non-Specified Person):** The GTA (service provider) is responsible for paying GST.
### **Recommended Steps for Compliance:**
1. **GTA Services Provided to an Individual:**
- **Check the Nature of Service:** Verify if the service receiver qualifies as a specified person under GST or service tax regulations.
- **GTA’s Responsibility:** If the receiver is an individual, ensure that the GTA complies with their obligation to pay GST/service tax.
2. **Document and Compliance:**
- **Maintain Proper Documentation:** Keep all invoices and records related to the service to ensure proper compliance.
- **File Returns Accurately:** Ensure that GST/service tax returns reflect the correct payment and liability details.
By adhering to these guidelines, both the service provider and receiver can ensure compliance with the applicable tax regulations.
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