cenvat credit on GTA service.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 July 2011 Very Urgent
Dear,

Pl guide, We are into manufacturing and we are providing installation service also.

We pay service tax on inward transportation (GTA)service under reverse charge method on behalf of transporter availing benefit of abatement.

Can we avail credit of this service tax paid on GTA?
Is there any need to take any declaration from transporter for availing credit?

regds
Pradeep

U S Sharma

U S Sharma (Expert)
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16 July 2011 yes you can take cenvat credit on GTA service provided such GTA service is used for input carrige

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Querist : Anonymous

Querist : Anonymous (Querist)

16 July 2011 we r a manufacturing company and providing installation service to our clients and we charge service tax on that..

and can pls clarify that we r taking abatement of 755.
and this does not affect the cenvat credit

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U S Sharma

U S Sharma (Expert)
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16 July 2011 GTA abatement is not effecting input credit, coz you are not providing GTA service, but availing

Querist : Anonymous

Querist : Anonymous (Querist)

16 July 2011 r u sure sir..

plz consult some other persons also so that all doubts will be clean and clear.

And thanks for your valauable advice.

Querist : Anonymous

Querist : Anonymous (Querist)

16 July 2011 Exemption of GTA service- Notification No. 1/2006-S.T. amended and new
Notification No. 13/2008-S.T., issued.- In the case of services provided for the
transport of goods by road in a goods carriage, service tax is required to be paid by certain
categories of persons who pay the freight instead of the service provider namely Goods
Transport Agency. The actual amount of service tax payable is 25% of the amount of freight
i.e. 75% of amount of freight is provided as abatement, subject of the condition that no
Cenvat credit of the duty paid has been availed of under Cenvat Credit Scheme. It has been
represented that fulfillment of the condition of non-availment of Cenvat credit by the service
provider is, at times, difficult to prove, when the service tax is required to be paid not by
the service provider but by the consignor or consignee who pays the freight. Taking into
account the special nature of the goods transport agency (GTA) service, it is being
exempted from the payment of service tax unconditionally to the extent of 75% of the
freight. In other words, service tax is required to be paid only on 25% of the freight
irrespective of who pays the service tax. Simultaneously, the benefit of Cenvat credit has
been withdrawn to GTA service under Cenvat Credit Scheme by deleting the said service
from the scope of output service in the CENVAT Credit Rules, 2004. Henceforth, the person
who is required to pay service tax under reverse charge method on GTA service can pay
service tax on 25% of the freight unconditionally. Recipient of GTA service paying service
tax under reverse charge method is no more required to prove non-availment of CENVAT
credit by GTA service provider.

CREDIT ON GTA SERVICE IS NOT AVAILABLE..
THANX AGAIN FOR YR REPLY.
REGARDS
PRADEEP SINGH