Gta

This query is : Resolved

Sanjay Chotara (Querist)
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25 November 2015 A who is GTA, B is mediator (Clearing agent) while C is Ultimate client. Here, A charge bill amounting to rs 100(without Service Tax) to B, further Mr B make billing to C amounting to Rs 150 (without Service Tax).

Now as per service provision who is liable to pay tax and at what amount ?
Is B liable to pay Service tax and further B charges in invoice and than again C is also liable..??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 November 2015 B is liable to pay service tax. C is not liable to pay service tax/

Sanjay Chotara

Sanjay Chotara (Querist)
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25 November 2015 B is shipping body corporate. While B make bill to C for 150.

So, on which amount service tax is payable 100 or 150..??

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 November 2015 Service tax is payable on 150.

Sanjay Chotara

Sanjay Chotara (Querist)
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25 November 2015 Than B has to raise bill amounting to Rs 150 + ST (14.5% * 0.30) to C..??

But as per invoice received from A, it is written that ST payable on Rs. 100. So, in that case what to do. Are we right paying St on 150..??

Sanjay Chotara

Sanjay Chotara (Querist)
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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 November 2015 Initially you have to pay service tax under RCM for 14.5% on 30% on Rs. 100. Charge service tax on 150 pay and collect it from C.

Sanjay Chotara

Sanjay Chotara (Querist)
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25 November 2015 than it is double taxation i think so.

100 @ 4.2% = 4.2
150 @ 4.2% = 6.3
Total = Rs. 10.5

4.2 to be paid at early stage and than collect 6.2 from C and again it be paid.

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 November 2015 Claim cenvat credit on 4.2 while paying 6.2. For your 150 Rs charge 14% service tax payable on 100%.

Sanjay Chotara

Sanjay Chotara (Querist)
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25 November 2015 it means we have to pay 4.2 at initial stage, than we have to pay Rs 21.75 (150 @ 14.5%) after availing cenvat of Rs 4.2

But clients may say no as ST abatement is available on it.

Prakash Mundada

Prakash Mundada (Expert)
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26 November 2015 SERVICE TAX ON GTA IS PAYABLE WHEN THE TRANSPORTATION CHARGES ARE PAID TO GTA IT MEANS ONLY TO THE TRANSPORTER NOT REIMBURSEMENT HENCE ONLY DIRECT PAYMENT TO TRANSPORTER WILL BE COVERED UNDER SERVICE TAX HENCE 'B'IS LIABLE TO PAY SERVICE TAX PROVIDED SERVICE RECEIVER IS A SPECIAL PERSON I.E., COMPANY, PARTNERSHIP FIRM. AND IF B IS COLLECTING SERVICE TAX ALSO FROM C THEN C CAN TAKE CENVAT CREDIT OF SUCH AMOUNT AND C IS NOT LIABLE TO PAY SERVICE TAX ON SUCH AMOUNT ON WHICH ALREADY ST IS PAID BY B

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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26 November 2015 Your reply is correct if B raises a bill of 100, but now B is raising 150 that is the problem it not a pure agent service.

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Sanjay Chotara

Sanjay Chotara (Querist)
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26 November 2015 Sir but B is adding profit margin so at what rate B should charge service tax while making billing to C..??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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27 November 2015 He is not a GTA so no abatement available besides service tax payable on reimbursement of expenses. So 14% service tax payable on 150.