Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Can service tax input setoff with output tax of abatement

shahul hameed (ACCOUNTANT) (25 Points)

07 August 2015

Sirs,

Please clarify: Our private limited company has input service tax @ 14% paid for various services received.

We pay freight charges (GTA) for which 75% abatement on service tax is allowed. We remit 3.5% service tax directly to the Central Govt. Can we set off this GTA service tax (3.5%) liability with the regular input service tax (14%).

Thanking you in advance

Shahul Hameed

Reply
Follow
Share

2 Replies

Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (3427 Points)
Replied 09 August 2015

Service Tax liability arise when consignment note is issued and a GTA will be liable to pay Tax only when both Service Provider and Service Receiver are individuals.
The rate of Tax is @ 25% (i.e., abated value as seen from the above table), if the GTA avails Cenvat Credit to set them off with its output liability;
If the GTA avails any Cenvat Credit, the rate of Tax would be @ 100% value.

(f) Services provided by Government or local authority

Reverse charge applies to all Services except certain specified Services;
The Government Department needs to be registered and pay Service Tax on support Services of –

ü Renting of immovable properties and

ü Speed post, express parcel, life insurance.