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Service tax on GTA services

Arun Kumar Aggarwal (Service) (65 Points)

25 December 2007

A company gets transportation services from a small transporter,whose annual revenue is less than Rs. 8 lacs ( Exempted from Service Tax).Is company liable to deposite Service tax on the amount of Freight paid by it. If company is exemped to deposit service tax by virtue of the exemption of the transporter,than what document the company should have from the transporter to avail the exemption.

CA. Arun K. Aggarwal

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5 Replies

castudent86 (csc) (38 Points)
Replied 26 December 2007

Mr. Agrawal, the liability in this case being on the service recipient under reverse charge mechanism; the person will be liable to pay service tax. the limit of taxable turnover(in this case, 800000) does not apply where liability lies on the service reciever

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Mukesh (Self employed) (71 Points)
Replied 26 December 2007

ST liabilty on shoulder of service receiver for GTA. Exemption upto 8 lac would not applied.

(Guest)

In Case Service Receiver is a Govt. depart. and receive the services of GTA and Service Tax was not paid by GTA . Please clearify The Position Of Govt. Depart.

(Guest)

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CA PRAMOD SARAOGI (Chartered Accountant) (1113 Points)
Replied 29 June 2008

Under Rule 2(1) (D) THE LIABILITY TO pay service tax on Freight has been shifted to the consignee i.e.PERSON LIABLE FOR PAYINGERVICE TAX in certain specified cases.Since a Company is covered under this rule the liability tp pay service tax on Freight rests upon your company under this REVERSE CHARGE METHOD. The threshold limit applies to Service Provider only . Here you are not a service Provider you cannot avail the exemption.