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Input credit upon the service tax paid to GTA

Riddhi (Sr. Manager - Finance) (81 Points)

02 January 2009

Whether the service receiver can take the credit of the service tax paid to GTA @ 3.09%

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11 Replies

geetha (Employee) (25 Points)
Replied 02 January 2009

In case of GTA instead of service provider Service receiver will pay the tax

As per Budget notification there is a dispute on GTA credit

According to the notification GTA credit is not allowed to the service provider but service receiver who pays the tax is eligible to take credit. Because GTA service is considered as an input service to the service receiver.

So service receiver can take credit of the service tax paid to GTA @ 3.09%

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Kirti Trivedi (Accountant) (31 Points)
Replied 03 January 2009

We are mfg.er and one of seven categories.

We are paying GTA service tax 25% on freight.

Can we take credit of GTA service tax paid by us.

Thanks

Kiriti

CA CS Akashdeep Singh (Practicing CA) (1394 Points)
Replied 04 January 2009

Originally posted by :Kirti Trivedi
"	We are mfg.er and one of seven categories. We are paying GTA service tax 25% on freight. Can we take credit of GTA service tax paid by us. Thanks Kiriti	"

As given by you, you are manufacturer.

If you pay service tax on GTA services received by you, then you can take the CENVAT credit and adjust it in your excise liability

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 05 January 2009

Yes, you are eligible for credit.

Anoop Garg (FCA) (120 Points)
Replied 14 January 2009

Cenvat credit of Service Tax paid on GTA is eligible on outward freight for destination the ownership of goods remains with the manufacturer.

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Dinesh pratap singh (C.A. Final Student) (54 Points)
Replied 14 July 2009

Service tax paid on freight inward (upto the place of removel) after abaitement in GTA adjust while, paying excise liability and/or service tax liability on output service.

The service provided by a Goods Transport Agent (GTA) for which the consignor or the consignee is made liable to pay service tax does not become an ‘output service’ for such consignor or the consignee. Therefore, the service tax payable by the consignor or consignee on transportation of goods by road cannot be paid through credit accumulated by such consignor or consignee. For example, a manufacturer of steel sheets procures duty paid steel ingots as input and avails CENVAT credit of the excise duty paid on ingots. He clears his finished goods i.e., steel sheets on payment of excise duty and sends the same to the customer, engaging the service of a goods transport agency. In this case, he pays service tax on service received by him for transportation of the goods. However, the input credit taken on steel ingots cannot be used for payment of service tax applicable to goods transport agency. The reason is that the such manufacturer (consignor) is not the service provider. The transport service is being provided by the ‘goods transport agency’ and the excise assessee pays the service tax only for the reason that the liability for payment of service tax has been shifted to the service receiver. Accordingly, the consignor or the consignee has to pay service tax in cash on goods transport by road service. “(These word from Honourable Supreme Court in caseof M/S Sandur Mico CIrcuits VS Commi. of central excise

sumeer mathur (COMPANY SECRETARY) (31 Points)
Replied 06 September 2010

Hi all ,

we are a tower manufacturing company paying for freight inward as well as for freight o/w,

we are depositing gta on freight of both inward/outward ,(on the basis of 25% of freight @ 10.3%)

now the question is that whether the gta we are paying can be taken as input credit while paying the excise duties .

please help

regards

ananta (accountant) (21 Points)
Replied 01 November 2010

Hi all ,

we are Automobile parts manufacturing company paying for freight inward as well as for freight o/w,we are depositing gta on freight of both inward/outward ,(on the basis of 25% of freight @ 10.3%)

now the question is that whether the gta we are paying can be taken as input credit while paying the excise duties . Till date service tax department authorities have not objected but now they have informed us we can not take the credit. Can any body clarify this . Is their any rules pertaining to this .

please help

regards

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 02 November 2010

The matter of ST credit on inwards and intermittent movement is clear.. Credit available no dispute.

For otwasrd fregiht there have beeb some disputes and at present the decision to restrcit the same by the Tribunal has been stayed by the Karnatak HC. You could aavil the credit and if object\d by the dept reverse the same [ only outward freight amount] under protest.

Dinesh (Sr. Executive) (21 Points)
Replied 08 May 2012

Hi,

Please clarify my quarry :-

We have paid our GTA liability for the month of Apri'12 on 05.05.2012 .

Can we take credit of GTA in the return of April'12.

Regards.....

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Madhusekar.N (Accounts Manager) (25 Points)
Replied 27 September 2013

We are logistics and warehousing company. We are paying service tax on transport services under GTA. We are paying 12.36% of ST on 25% of transport charges(on transport charges of rs.100/- we are paying rs.3.09 as serv.tax). Pl. inform can we avail,as input credit, this service tax of rs.3.09 to adjust against our ST payment liability.

----Madhu