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Service tax on gta

Naveen Kumar (article assistant) (43 Points)

20 October 2013

Queries on GTA

Service receiver is a company.

1. Under reverse charge mechanism who is liable to pay service tax on GTA?

a. in case where service provider is not claiming CENVAT credit.

b. in case where service provider is claiming CENVAT credit.

2. Is liability arises for service receiver even though the receiver has paid 100%

service tax to service provider along with the bill?

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1 Replies

Ganeshbabu K (Audit and Tax Advisory) (48564 Points)
Replied 21 October 2013

Goods Transport Agency

¨ Tax when consignment note issued. Simple transport of goods service (without issue of consignment note) is not a GTA service.

¨ Person liable to freight is liable to pay service tax on GTA if he is body corporate, factory, registered dealer under Central excise, society, cooperative society, partnership firm (registered or not).

¨ Tax on 25% if GTA does not avail Cenvat Credit – Hence service receiver should get certificate from him that he has not availed Cenvat credit.

¨ Otherwise tax on 100% value.

¨ GTA is liable to pay service tax if (a) person liable to pay freight is individual or HUF (b) Person liable to ay freight is outside taxable territory (like J&K, Nepal, Bhutan, Bangla Desh, Pakistan etc.).