Liablitiy on fright servics tax deposit of a company on gta

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

22 June 2013 As we know the liability of services tax deposited by company 25% of freight,and another portion 75% paid by services provider,but some cases we do not deposited services tax, sir can u explain reason behind it?

Ganeshbabu K

Ganeshbabu K (Expert)
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22 June 2013 1)GTA is a Tax when consignment note issued. Simple transport of goods service (without issue of consignment note) is not a GTA service.

2)Person liable to freight is liable to pay service tax on GTA if he is body corporate, factory, registered dealer under Central excise, society, cooperative society, partnership firm (registered or not).

Ex: as per payment terms if customer is liable to pay frieght customer only responsile to discharge service tax on GTA service. suppose you have paid amount to GTA for frieght it can be under stood that you have paid on behalf of customer and you are not liable to discharge service tax.

3)GTA(service provider) is liable to pay service tax if (a) person liable to pay freight is individual or HUF (b) Person liable to ay freight is outside taxable territory (like J&K, Nepal, Bhutan, Bangla Desh, Pakistan etc.).

Thanks & regards
Ganesh babu k

CA Priti Surana

CA Priti Surana (Expert)
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24 June 2013 In case of GTA, Only the person liable to pay freight is responsible to pay service tax and that too on 25% of freight. No further liability of other person on rest 75%.

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Ganeshbabu K

Ganeshbabu K (Expert)
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24 June 2013 1)Tax payable on 25% of value if Cenvat credit has not been availed by service provider. Hence, it is necessary to obtain certificate from the service provider (GTA) that he has not availed any Cenvat credit.

2)Otherwise, service tax will be payable on 100% of the value.

3)in case of GTA entire tax is payable by service receiver only..it is complete reversecharge and it is not joint charge like manpower supply or work contract service where service provider and service receiver both are liable.

5)however GTA is liable to pay service tax...in case of as i mentioned in above reply third point.

Thanks & regards
Ganesh babu k

CA Priti Surana

CA Priti Surana (Expert)
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27 June 2013 Agreed....!