POPS of a GTA service
This query is : Resolved
17 September 2016
Suppose consignor and GTA are in non-taxable territory and destination of goods is in taxable territory...
then what will be the pops for the service and who will be the person liable to pay service tax??
17 September 2016
The service recipient in located in taxable territory are liable to pay service tax.
20 October 2016
thanks for your view...but here consignor is supposed to be the service receiver..as he would have booked the gta...will it be exempted vide mega exemption 25/2012 entry no. 34(c)??
10 August 2024
In the context of Goods Transport Agency (GTA) services under Indian service tax regulations, here’s how the Point of Taxation (POT) and the liability to pay service tax are determined:
### **Point of Taxation for GTA Services:**
1. **Service Provided in Non-Taxable Territory:**
- **Consignor and GTA in Non-Taxable Territory:**
If both the consignor (shipper) and the GTA (transportation service provider) are located in a non-taxable territory, and the destination of goods is in a taxable territory, then the service provided by the GTA is considered as a service provided from a non-taxable territory to a taxable territory.
2. **Point of Taxation (POT):**
- According to the Point of Taxation Rules, 2011, for GTA services:
- **Rule 3:** The point of taxation is generally the earlier of the date of invoice or the date of payment, provided the invoice is issued within 30 days of the date of service.
- **Rule 4:** If the service is provided from a non-taxable territory to a taxable territory, the place of provision of service will be the location of the service receiver (in this case, the consignee, who is in the taxable territory).
3. **Applicability of Exemption (Mega Exemption Notification No. 25/2012):**
- **Entry No. 34(c):** This entry exempts services of a GTA when the service is provided in relation to transportation of goods by road (other than the specified exceptions) from a place outside India to a place within India, or vice versa.
- In your case, since both the consignor and the GTA are in non-taxable territories and the destination is in a taxable territory, the service is provided from a non-taxable to a taxable territory. Entry No. 34(c) might not be applicable as it primarily covers specific scenarios such as imports or exports.
### **Liability to Pay Service Tax:**
1. **Reverse Charge Mechanism:**
- Under the reverse charge mechanism, if the service provider is located in a non-taxable territory and the service receiver is in a taxable territory, the service receiver (consignee) is liable to pay the service tax.
2. **GTA Services:**
- For GTA services, as per Notification No. 30/2012-ST dated 20.06.2012, the service receiver (i.e., the consignee or the person who is paying for the transport service) is liable to pay the service tax under the reverse charge mechanism.
- The service tax liability would be on the consignee in the taxable territory.
### **Summary:**
- **Point of Taxation (POT):** The POT for GTA services in your scenario will be the date of invoice or payment, whichever is earlier, as per Rule 4 of the Point of Taxation Rules, 2011.
- **Liability to Pay Service Tax:** The consignee (service receiver in the taxable territory) will be liable to pay the service tax under the reverse charge mechanism.
- **Exemption Applicability:** The exemption under Mega Exemption Notification No. 25/2012, Entry No. 34(c) might not apply in this situation as it primarily covers international transportation scenarios and specific exemptions.
It is essential to review the current notifications and rules applicable as regulations can change. For the most accurate and detailed advice, consulting a tax professional or legal expert would be prudent.
### **Point of Taxation for GTA Services:**
1. **Service Provided in Non-Taxable Territory:**
- **Consignor and GTA in Non-Taxable Territory:**
If both the consignor (shipper) and the GTA (transportation service provider) are located in a non-taxable territory, and the destination of goods is in a taxable territory, then the service provided by the GTA is considered as a service provided from a non-taxable territory to a taxable territory.
2. **Point of Taxation (POT):**
- According to the Point of Taxation Rules, 2011, for GTA services:
- **Rule 3:** The point of taxation is generally the earlier of the date of invoice or the date of payment, provided the invoice is issued within 30 days of the date of service.
- **Rule 4:** If the service is provided from a non-taxable territory to a taxable territory, the place of provision of service will be the location of the service receiver (in this case, the consignee, who is in the taxable territory).
3. **Applicability of Exemption (Mega Exemption Notification No. 25/2012):**
- **Entry No. 34(c):** This entry exempts services of a GTA when the service is provided in relation to transportation of goods by road (other than the specified exceptions) from a place outside India to a place within India, or vice versa.
- In your case, since both the consignor and the GTA are in non-taxable territories and the destination is in a taxable territory, the service is provided from a non-taxable to a taxable territory. Entry No. 34(c) might not be applicable as it primarily covers specific scenarios such as imports or exports.
### **Liability to Pay Service Tax:**
1. **Reverse Charge Mechanism:**
- Under the reverse charge mechanism, if the service provider is located in a non-taxable territory and the service receiver is in a taxable territory, the service receiver (consignee) is liable to pay the service tax.
2. **GTA Services:**
- For GTA services, as per Notification No. 30/2012-ST dated 20.06.2012, the service receiver (i.e., the consignee or the person who is paying for the transport service) is liable to pay the service tax under the reverse charge mechanism.
- The service tax liability would be on the consignee in the taxable territory.
### **Summary:**
- **Point of Taxation (POT):** The POT for GTA services in your scenario will be the date of invoice or payment, whichever is earlier, as per Rule 4 of the Point of Taxation Rules, 2011.
- **Liability to Pay Service Tax:** The consignee (service receiver in the taxable territory) will be liable to pay the service tax under the reverse charge mechanism.
- **Exemption Applicability:** The exemption under Mega Exemption Notification No. 25/2012, Entry No. 34(c) might not apply in this situation as it primarily covers international transportation scenarios and specific exemptions.
It is essential to review the current notifications and rules applicable as regulations can change. For the most accurate and detailed advice, consulting a tax professional or legal expert would be prudent.
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