Service tax clarification

This query is : Resolved

dheeraj kumar (Querist)
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14 March 2014 Sir

Please explain the below mentioned concept in simple example

The GTA abatement is available subject to the condition that the CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

Regards
Dheeraj Kumar

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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15 March 2014 Eg. Y is a goods transporter and is liable to pay service tax.

For providing such service he purchased a truck which is capital goods.

He got his truck serviced which is input service.

On the capital good & input service he paid service tax.

He is eligible to avail CENVAT credit of the service tax.

He has to pay service tax on freight collected by him.

He can avail abatement of 75% if he DOES NOT avail CENVAT credit of service tax paid on capital good & input service.

dheeraj kumar

dheeraj kumar (Querist)
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15 March 2014 ON CAPITAL GOODS NO SERVICE TAX IS APPLICABLE
DO YOU MEAN EXCISE PL CONFIRM

WHY WILL HE PAY SERVICE TAX ON FREIGHT COLLECTED WHEN AS PER LAW BURDEN OF SERVICE TAX ON GTA HAS BEEN TRFD ON RECEIVER OF SERVICE

PL CLEAR MY DOUBTS
THANKS

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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15 March 2014 1. Sorry I meant excise duty.

2. Reverse charge is NOT applicable in ALL cases. It is applicable only when the person making payment of freight is one of the specified persons.

Reverse charge is NOT applicable when the person making payment of freight is an INDIVIDUAL or HUF.

In this case the service tax is to be paid by the GTA.

dheeraj kumar

dheeraj kumar (Querist)
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15 March 2014 THANKS FOR YOUR VALUABLE ANSWER