S.t. on gta

This query is : Resolved

ashwini (Querist)
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05 July 2012
Dear Sir,

Can you ans my following queries?

In case of GTA liability to pay S.T. is on the Company receiving Transportation Services. My queries are

1)Where in some cases Transporter Agency charge S.T. @10.30% on 25% of the transportation charges ( i.e. After 75% Abatement), whether the reverse charge mechanism is attracted to the service receiver also??

2)Whether the Service receiver can also avail the benefit of Abatement of 75% for discharging its liability related to reverse charge mechanism ??

Thanks

Best Regards
Ashwini

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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05 July 2012 The payment of service tax tothe GTA shouldnotbe made as they are not liable.
The company shouldpay the service tax and can claim 75% abatement.
The rate now is 12.36% from 1.4.2012.

C.A Anshul Singhal

C.A Anshul Singhal (Expert)
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05 July 2012 if Transpotor charge service tax on bilty and recover from service receiver than service receiver can take cenvat of service tax on inward otherwise not.

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CA Vanesh Nadar

CA Vanesh Nadar (Expert)
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05 July 2012 Procedure for availing abatement prescribed.- An abatement of 75% in taxable service
of goods transport by road is available on the condition that the goods transport agency has
not availed credit on inputs and capital goods used for providing taxable service and has
also not availed benefit of Notification No. 12/2003- Service Tax, dated 20.6.2003 (vide
Notification No. 32/2004-Service Tax, dated 3.12.2004 [now 1/2006-S.T., 1.3.2006]. It has
been requested that in cases where liability for tax payment is on the consignor or
consignee, the procedure as to how it should be confirmed by such consignor or consignee
that the goods transport agency has not availed credit or benefit of Notification no.
12/2003- Service Tax may be prescribed. In such cases it is clarified that a declaration by
the goods transport agency in the consignment note issued, to the effect that neither credit
on inputs or capital goods [now input services also] used for provision of service has been
taken nor the benefit of Notification no. 12/2003-Service Tax has been taken by them
suffice for the purpose of availment of abatement by the person liable to pay service tax.
[vide M.F.(D.R) Letter F.No. B1/6/2005-TRU, dated 27.7.2005- 2006 (1) S.T.R.
(C48).
Goods transport agency-Abatement of 75% -Withdrawal of letter confirmed.-
Several references are received on the above issue. This Directorate had issued a
clarification vide letter of even No. dated 30.3.2005 [2006 (1) S.T.R. C40)], that the benefit
of Notification No. 32/2004-S.T., dated 3.12.2004 is not available in cases where the
provision of Notification no. 35/2004-S.T., dated 3.12.2004 are applicable. However, said
letter dated 30.3.2004of this office had been withdrawn by this Directorate vide letter
of even No. dated 11.4.2005 [2006 (2) S.T.R. S34]