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Gta service tax on transportation charges

raju salve (Accounts officer) (42 Points)

03 January 2013

One party Who is dealer in spare part, Paying Transportation Charges on Spare Part Received From manufacturer regularlay and the same party charges some of amount to some party at the time sales of goods . Now the Transporation Ledger Showing Debit Amount Rs.150500 and credit amount is Rs.15680. Please Clarify me on what amount I have to pay GTA Service Tax.

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4 Replies

CA D.C. Bansal (Accounts Head) (283 Points)
Replied 03 January 2013

Party has to pay service tax on amount being paid to transporter i.e.150500/-. As well as if the party is also paying the freight on sales, he has to pay service tax on that freight also.

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raju salve (Accounts officer) (42 Points)
Replied 03 January 2013

Rs.15680 recovered as transportation charges from customer. Is the amount liable to pay gta service tax.

CA D.C. Bansal (Accounts Head) (283 Points)
Replied 04 January 2013

Any recovery from the customer is irrelevent. The only relevent factor is payment to transporter. Any collection from the customer is not liable for service tax.

Sonu Kumar (Account Manager) (665 Points)
Replied 05 January 2013

As per section 65B(26) "Goods transport agency" means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called;

In relation to taxable service provided by a goods transport agency, Reverse Charge shall be applicable and service tax shall be paid by the consignor or consignee whosoever is liable to pay freight (transportation charges) and also such consignee or consignor should be atleast one of the persons mentioned below.

Reverse Charge shall be applicable where the consignor or consignee of goods is atleast one of the persons mentioned below:

(a) Any factory registered under by the Factories Act, 1948;

(b) Any society registered under the Societies Registration Act, 1860;

(d) Any dealer of excisable goods, who is registered under the Central Excise Act, 1944;

(e) Any body corporate established, by or under any law;

(f) Any partnership firm whether registered or not under any law including association of persons.

If neither the consignor nor the consignee is one of the persons mentioned above, in that case service tax shall be paid by the Goods Transport Agency and Reverse Charge shall not be applicable.

Example

If ABC Ltd. of Delhi has taken services of GTA and goods have been sent to Bombay and freight is payable by the consignee at Bombay, in this case service tax shall be paid by the consignee and not by the GTA.