19 October 2013
GTA is covered under Reverse Charge Mechanism. As per the latest provisions, service recipients are liable for payment of service tax irrespective of whether the service provider is registered or not. Threshold level of exemption not applicable.
Hence if the GTA service recipient receives consignment of more than Rs.750/- then he is liable to pay Service Tax @ 12.36% after availing of 75% abatement i.e.on 25% of the freight bill.
To be liable the Service Provider has to issue a Consignment Note and if such Consignment Note is issued, the recipient is liable to pay the Service Tax. Since GTA payments are not eligible for Input Credit, the ST need not be shown separately in the Consignment Note or whose liability it is to pay the same.
Hence the service recipient is liable for payment of service tax.
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