Goods transport agency

This query is : Resolved

CELINE GEORGE (Querist)
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19 February 2015 In case of goods transport agency, the person paying the freight is liable to pay service tax. But suppose the GTA charged service on transportation to its client. the suggested course of action would have been for the client to deduct service tax portion and pay the GTA only for the transportion and to deposit the service tax with the CG itself.

Query 1: What would be the consequences if the the client paid the GTA the full amount charged including the service tax wrongly charged and the GTA, not having any CENVAT credit avaialble, deposited the entire service tax so collecetd with the the Givt.?

Query 2: What would be the consequences and corrective course of action if the GTA used avaialable CENVAT credit to pay the said service tax so errorneously collected?

CA Robin Betala

CA Robin Betala (Expert)
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19 February 2015 There is a case law Umasons Auto Combo Pvt Ltd vs CCE as per the case law my opinion is where service tax is paid by Service provider under RCM then it cannot be recover from service recipient due to double taxation and as per the case law it wont affect if the service provider has paid it from cenvat credit as provider is not barred from paying through cenvat credit.