Service on gta

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 March 2014 Sir,
When the service provider like M/s GATI Ltd.,M/s Blue dart who are charging service tax on full amount without claiming abatment, whereas some transporter like M/s VRL are charging service tax on 25% of freight claiming 75% as abatement. My question is
1) whether we as registered under excise should pay S.T on balance 75% which they have claimed abatement. (Reverse machinism)
2) Can we take credit of S.T. charged in those bill of M/s VRL.
3) Some transporter are not charging S.T on which i am paying S.T. availing benefit of abatement @ 75%.
Note : This is with reference to inward of goods.
Kindly clarify.
Thanks in advance

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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14 March 2014 1. You do NOT have to pay the service tax. Abatement means exemption from service tax.

2. You can avail CENVAT credit of the service tax charged by the transporter in his invoice.

3. Your practice of paying service tax after availing abatement is correct.

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