01 October 2013
Our company is limited company. A transport agency is charging service tax @12.36% on freight charges. We requested them not to charge service tax instead we will pay service tax under reverse charge @3.09%. However they refused to do so. I want to know whether GTA is entitled to charge service tax @12.36%. If yes, under what provisions ? if not, what are the provisons to convince them. Please reply soon?
02 October 2013
The GTA is not required to charge any service tax. Please note that you are liable to pay service tax under RCM irrespective of the fact that full service tax is already charged and paid by the service provider. You are liable to pay, if you are not availing CENVAT, service tax @ 12.36% on 25% of the value of GTA service received by you. ****For clarification and Premier service pl contact group.blr@gmail.com
*Disclaimer- all answers are given as per the facts narrated by you. Answer may differ after study of full facts/statements/agreements etc. involved in the case.
03 October 2013
Agree with the answer, except that the condition of availment of Cenvat is not applicable in case of payment of tax under the Reverse Charge Mechanism, as the service itself is not an output service(Rule 2 (p) of Cenvat Credit Rules, 2004).
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