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Service tax on freight (urgent)

Naveen Gupta (CA ) (123 Points)

30 October 2009

Please clerify the taxability of service tax on freight n abatement system as well as Input credit can be taken or not?

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12 Replies

Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 30 October 2009

Naveen

In case of GTA services if service receiver is specifiec person as specified in the list then liabilty to pay service tax is on service receiver & whatever amount he pay as service tax he can take the credit of such amount.

Otherwise service provider is liable to pay service tax.

And if you talk about abatement, 75% abatement is allowed to GTA on the condition that transporter could not avail the credit on input & CG used for providing the taxable service.And transporter has to provide note in written to service receiver about the above declaration But now this declaration is also withjdrawn.

Hope this will be sufficient for ur query.

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Naveen Gupta (CA ) (123 Points)
Replied 30 October 2009

THANKS FOR UR REPLY DEAR,

But u have write that abatement is allowed 75% on the condition, which is now withdrawn, than in such cases is there is any further notification?

and whatever amt is liable for service tax, can the same can be adjusted from Service tax input?

Naveen Gupta (CA ) (123 Points)
Replied 30 October 2009

THANKS FOR UR REPLY DEAR,

But u have write that abatement is allowed 75% on the condition, which is now withdrawn, than in such cases is there is any further notification?

and whatever amt is liable for service tax, can the same can be adjusted from Service tax input?

Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 30 October 2009

Firstly

Transporter have to give a consignment note to service receiver that "They can't take credit on input & CG for providing the taxable service " but now govt. has withdrawn the requirement of submission of that consignment note but condition is same as it is.

And about the credit , whatever amount you pay as service tax on freight , you can take the credit for such amount.

Hope query is resolved.

Naveen Gupta (CA ) (123 Points)
Replied 30 October 2009

thanks for early reply

but my question is that can we set off amt payable as service tax with service tax input which we have taken on input (earlier) or it payable as separately?

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Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 30 October 2009

No...........

Service Tax Payable on frieght is seperately paid no cenvat credit is allowed for making the payment..............

Naveen Gupta (CA ) (123 Points)
Replied 30 October 2009

thanks dear

nw my query is solve.

Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 30 October 2009

But Naveen

One thing i would like to clear you that there was many cases on utilisation of credit against the payment of service tax on frieght but this might be arise various issue for us so this is the clear & simple procedure.

Pay the service Tax & Take the credit.

Naveen Gupta (CA ) (123 Points)
Replied 30 October 2009

fine dear

thanks a lot for providing me information............

Aayush Kumar Agrawal (Chartered Accountants) (66 Points)
Replied 31 October 2009

There is two types of transportation cost

1) Inward Transportation

2) Outward Transportation

The Service tax is payable on both the transportation cost .

Servive tax amount to 25% of the billl value is to be paid .

Like if the bill fo Inward Trs. is RS 20000/- and that of Outward Transpration is RS 50000/-

Total Service tax = Rs 70000*.25*10.3% = 1802.5 is to be paid.

Input for the Inward transportation would be available as the act says Input Services upto the place of Removal i:e of RS 20000*.25*10.3% = 515

Service Tax for the Outward transportation would not be available i:e of RS 50000*.25*10.3% = 1287.5 and the same would be charged to Profit and Loss Account.

I case of any query Naveen Contact me.