Reverse charge

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 February 2016 Transport agent (pvt co) charge service tax Rs 522 i.e 12000*30%*14.5% (after taking abatement).
Now in that case a pvt ltd co, as a service receiver, whether there is a liability on service receiver to charge service tax under RCM

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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20 February 2016 Notification No. 30/2012-ST dated 20-06-2012 has been issued which covers GTA service and shifts full (100%) liability of service tax on the service receiver. Any person located in taxable territory, who pays or is liable to pay freight is treated as service receiver.

As per Entry No. A(ii) of N/No.-30/2012, reverse charge is applicable only when taxable service provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road, where the person liable to pay freight is,—
a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948);
b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India;
c) any co-operative society established by or under any law;
d) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made there under;
e) any body corporate established, by or under any law; or
f) any partnership firm whether registered or not under any law including association of persons;

Since you are covered in (e) above, you are liable to pay service tax on freight.

RCM is a queer provision and the liability there under applies irrespective of whether service tax has been paid by teh service provider or not. The service recipient under RCM cannot claim benefit of the tax paid by service provider or someone else to free him from his obligation.

Therefore you are liable to pay the service tax under RCM. You may pay the GTA less service tax quoting the above referred notification, and if the service provider has already paid the duty, he can claim a refund on receipt of a letter from you and details of challan by which payment was made.

Querist : Anonymous

Querist : Anonymous (Querist)

22 February 2016 IF he is a clearing, forwarding and transport agent and paying transport expense on our behalf and charging service tax (30 %) after taking abatement. then ????

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Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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26 February 2016 With effect from 1st April 2015, any reimbursement received is part of the taxable value of the service. The only exemption is in case of Pure Agent. A clearing and forwarding agent can be a Pure Agent, if the requirements are met and the re-imbursement is of the exact amount spent and not in excess or less than the expense.