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Service Tax on GTA

Sanjay Sharma (Part Time Practice) (24 Points)

16 June 2009

Whether cenvat credit can be utilised if one does not avail the abatment and deposit service tax full ie 10.30% on payment made to GTA. Whether there is any difference if it is manufacturing unit and its final product is excisable.

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4 Replies

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 17 June 2009

First of all it is not understood why one would like to pay on 100% since the abatment is not conditional. However credit is available whether or not the abtement is claimed for manufacturers of excisable goods on inwartd as well as outward freight.

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Satish (CA Final Student) (479 Points)
Replied 17 June 2009

In service tax law, every abatement is conditional that the credit of Cenvat on inputs or capital goods or services are not availed in relation to output service. Incidence of service tax payment is born by receipient where he is a specified person and the transporter has ticked in the consignment note the person responsible for paying service tax as the receipient. But the service provider is still the transporter and it is notified that the abatement of 75% is available only if the provider of service has not availed any credit of cenvat on inputs, capital goods, or of service tax. Hence, abatement is not unconditional.

Pavan Jain S (Chartered Accountant) (1575 Points)
Replied 18 June 2009

As per Notification 13/2008 dated 1-3-08, availment of abatement in case of GTA is no longer unconditional. Service tax is levied only on 25% of the value of GTA service. Please correct me if i am wrong.