prc mechanism if gta levies 25% service tax

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titu (Querist)
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08 September 2012 sir ,

IF GTA levies 25% service tax on its freight bills , the following questions arise:-

1.Can Input ST credit in respect of 25% service tax be claimed by service receiver ?

2. Will the PRC mechanism come to picture ? if so , how mach percentage of ST will the service receiver supposed to pay ?

thanks in advance

ashok malhotra

CA Suresh Jain

CA Suresh Jain (Expert)
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09 September 2012 Before the question is answered it need to be understood that in case of GTA who is the person liable to pay the service tax.

As per rule 2(d) of service tax rules person liable to pay service tax in relation to service provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road, where the person liable to pay freight is,—

(a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948);

(b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India;

(c) any co-operative society established by or under any law;

(d) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder;

(e) any body corporate established, by or under any law; or

(f) any partnership firm whether registered or not under any law including association of persons;
any person who pays or is liable to pay freight either himself or through his agent for transport of such goods by road in a goods carriage

Therefore, if you are a person of description from (a) to (f) above you are the person liable to pay service tax.

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