Service tax goods transport agent reverse charge
This query is : Resolved
15 December 2011
I am a Service Provider and I want to pay Service tax on Goods Transport Agent on Reverse Charge basis. I am not registered for this service. Can I pay Service Tax on GTA under the regular service head for which I am registered or do I first need to register for GTA Service.
What is the rate of tax at which ST is to be paid on reverse charge on Goods Transport Agent?
Can I take Input Credit for the same?
What is the rate of tax at which ST is to be paid on reverse charge on Goods Transport Agent?
Can I take Input Credit for the same?
15 December 2011
1.You need to add GTA under your existing registration.
2.75% abatement is available from the gross amount of GTA bill. say GTA has submitted a bill of Rs. 100, 75% abatement will be claimed and on balance Rs. 25 you have to pay Service Tax @ 10% + 2% Edu.Cess + 1% secondary & Higher Edu. Cess.
3. Service Tax paid on GTA can be taken as input but Transportation paid upto the place of removal only is allowed for taking input Credit.As being the Service Provider, you can take input credit for Inward transporation of materials which are further being used in providing output services.
2.75% abatement is available from the gross amount of GTA bill. say GTA has submitted a bill of Rs. 100, 75% abatement will be claimed and on balance Rs. 25 you have to pay Service Tax @ 10% + 2% Edu.Cess + 1% secondary & Higher Edu. Cess.
3. Service Tax paid on GTA can be taken as input but Transportation paid upto the place of removal only is allowed for taking input Credit.As being the Service Provider, you can take input credit for Inward transporation of materials which are further being used in providing output services.
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15 December 2011
Who is liable to pay Service tax in the following cases: Supplier or my company
a. Purchase of Goods from Supplier. Supplier pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Supplier. GTA has issued the Invoice in the name of the Supplier.
b. Purchase of Goods from Supplier. Supplier pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Supplier. GTA has issued the Invoice in the name of my company.
c, What will be the answer to case a if Capital Goods are purchased from the Supplier and Transportation Charges reimbursed to the Supplier is Capitalized with the capital goods.
If as per your answer, the company is liable to pay Service Tax then can entire ST Input Credit can be claimed or 50% only since the Transportation Expenditure is capitalized.
Who is liable to pay Service tax in the following cases: C & F Agent or my company
a. Goods are imported and Clearing and Forwarding Agent pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Clearing and Forwarding Agent. GTA has issued the Invoice in the name of the Clearing and Forwarding Agent.
b. Goods are imported and Clearing and Forwarding Agent pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Clearing and Forwarding Agent. GTA has issued the Invoice in the name of my company.
a. Purchase of Goods from Supplier. Supplier pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Supplier. GTA has issued the Invoice in the name of the Supplier.
b. Purchase of Goods from Supplier. Supplier pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Supplier. GTA has issued the Invoice in the name of my company.
c, What will be the answer to case a if Capital Goods are purchased from the Supplier and Transportation Charges reimbursed to the Supplier is Capitalized with the capital goods.
If as per your answer, the company is liable to pay Service Tax then can entire ST Input Credit can be claimed or 50% only since the Transportation Expenditure is capitalized.
Who is liable to pay Service tax in the following cases: C & F Agent or my company
a. Goods are imported and Clearing and Forwarding Agent pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Clearing and Forwarding Agent. GTA has issued the Invoice in the name of the Clearing and Forwarding Agent.
b. Goods are imported and Clearing and Forwarding Agent pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Clearing and Forwarding Agent. GTA has issued the Invoice in the name of my company.
15 December 2011
Who is liable to pay Service tax in the following cases: Supplier or my company
a. Purchase of Goods from Supplier. Supplier pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Supplier. GTA has issued the Invoice in the name of the Supplier.
b. Purchase of Goods from Supplier. Supplier pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Supplier. GTA has issued the Invoice in the name of my company.
c, What will be the answer to case a if Capital Goods are purchased from the Supplier and Transportation Charges reimbursed to the Supplier is Capitalized with the capital goods.
If as per your answer, the company is liable to pay Service Tax then can entire ST Input Credit can be claimed or 50% only since the Transportation Expenditure is capitalized.
Who is liable to pay Service tax in the following cases: C & F Agent or my company
a. Goods are imported and Clearing and Forwarding Agent pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Clearing and Forwarding Agent. GTA has issued the Invoice in the name of the Clearing and Forwarding Agent.
a. Goods are imported and Clearing and Forwarding Agent pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Clearing and Forwarding Agent. GTA has issued the Invoice in the name of my company.
a. Purchase of Goods from Supplier. Supplier pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Supplier. GTA has issued the Invoice in the name of the Supplier.
b. Purchase of Goods from Supplier. Supplier pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Supplier. GTA has issued the Invoice in the name of my company.
c, What will be the answer to case a if Capital Goods are purchased from the Supplier and Transportation Charges reimbursed to the Supplier is Capitalized with the capital goods.
If as per your answer, the company is liable to pay Service Tax then can entire ST Input Credit can be claimed or 50% only since the Transportation Expenditure is capitalized.
Who is liable to pay Service tax in the following cases: C & F Agent or my company
a. Goods are imported and Clearing and Forwarding Agent pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Clearing and Forwarding Agent. GTA has issued the Invoice in the name of the Clearing and Forwarding Agent.
a. Goods are imported and Clearing and Forwarding Agent pays for the Transportation Charges to the GTA and later the Transportation Charges are reimbursed by my company to the Clearing and Forwarding Agent. GTA has issued the Invoice in the name of my company.
15 December 2011
Rule says..consignor or consignee who is paying freight will be liable to pay service tax..... Accordingly if Goods have been booked on "Freight to pay basis" then your company will pay freight to Transporter and applicable service tax on freight amount has to be discharged by your Company. If the freight has been paid by consignor (i.e., supplier), service tax liability on freight is on consignor and not on your company. It does not make any difference if your company has reimbursed the freight amount to supplier or transporter has raised the bill in your company name, as the basis fact is that your company has not paid freight to transporter, so there is no liability on your company. u are not liable to pay service tax for your points a & b under both the portions of your query.
So far as point C of first portion of your query is concerned, tell me tell you any tax for which credit has been taken cannot be capitalised. In case of Capital Assest u take 50% credit in first year, it does not mean balance 50% (which will be claimed in later year) will be capitalised.
Further, in this case u are paying Service Tax on GTA, u can take 100% input credit in current year.
So far as point C of first portion of your query is concerned, tell me tell you any tax for which credit has been taken cannot be capitalised. In case of Capital Assest u take 50% credit in first year, it does not mean balance 50% (which will be claimed in later year) will be capitalised.
Further, in this case u are paying Service Tax on GTA, u can take 100% input credit in current year.
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15 December 2011
Dear Vibhash
As per Section 2(d)(1)(v) of the Service Tax Rules, 1994
In relation to taxable service provided by a goods transport agency, where the consignor or consignee of goods is,-
(a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948)
(b) any company formed or registered under the Companies Act, 1956 (1 of 1956)
(c) any corporation established by or under any law
(d) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India
(e) any co-operative society established by or under any law
(f) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder or
(g) any body corporate established, or a partnership firm registered, by or under any law,
any person who pays or is liable to pay freight either himself or through his agent for the transportation of such goods by road in a goods carriage;
So if the clearing and forwarding agent clears goods from the customs and transports it to the company's factory premises and pays to the transporter which is later on reimbursed to the c&f agent, is it not the company paying through an agent
As per Section 2(d)(1)(v) of the Service Tax Rules, 1994
In relation to taxable service provided by a goods transport agency, where the consignor or consignee of goods is,-
(a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948)
(b) any company formed or registered under the Companies Act, 1956 (1 of 1956)
(c) any corporation established by or under any law
(d) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India
(e) any co-operative society established by or under any law
(f) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder or
(g) any body corporate established, or a partnership firm registered, by or under any law,
any person who pays or is liable to pay freight either himself or through his agent for the transportation of such goods by road in a goods carriage;
So if the clearing and forwarding agent clears goods from the customs and transports it to the company's factory premises and pays to the transporter which is later on reimbursed to the c&f agent, is it not the company paying through an agent
15 December 2011
My personal view is different. Practically what I have encountered is, C & F agent includes the cost of transportation in their bill and they charge service tax on total amount (incl freight). Logically also, GTA service is incidental to the services of C & F agent. So C & F agent may categorise the GTA under C & F services. Now in your case, if your company is reimbursing freight amount to c & f agent in above manner (frieght included in C & F agent bill), there is no service tax liablity for GTA on your company. Otherwise also C & F agency is agent for company for certain purpose like they can do custom clearance etc on company behalf. However, C & F agent is not the agent of the company for paying Freight. Other views welcome...
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