Service tax liability on service receiver

This query is : Resolved

CA Miss Naamah (Querist)
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30 September 2012 In case of reverse charge mechanism under service tax, the service receiver has to pay tax on behalf of service provider. In case, if service receiver is not registered under the Finance Act, 1994 (Service Tax), then who will bear the tax liability???

For example - In case if a GTA provides services to a retailer (consignor), who do not have service tax registration number and the receiver of the goods (consignee), also do not have service tax registration number, then who will may the tax?? Is GTA liable to collect tax and pay to government??

CA Suresh Jain

CA Suresh Jain (Expert)
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30 September 2012 The GTA is not liable to pay service tax. It is not the concern of GTA to ensure that the service tax is paid by the service receiver

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CA Miss Naamah

CA Miss Naamah (Querist)
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30 September 2012
Thank you sir for a quick reply. The issue is that the consignor is requesting the GTA to charge service tax and pay to the government on his behalf, because, just for one type of service transaction, the client do not want to get registered. Can GTA collect tax on behalf of client??

CA Suresh Jain

CA Suresh Jain (Expert)
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01 October 2012 No GTA can not do it. It has to be done by the receipient of service

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