Gta appliability

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 November 2012 Sir,

One of our client(Pvt ltd) is doing construction activity.Whether company is liable to pay Service Tax on Carting Exp.under the category of GTA?
Carting exp are incurred for the bringing material like brick,sand,greet etc to Site.

Kindly guide me

Regards,

CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)
Follow

28 November 2012 the carting exp which are incurred by the company are paid to whom ?
also whether the expense are incurred relating to purchase i.e. whether the company is paying the expenses to seller from whom the above mentioned goods are purchased or are incurred separately.

Querist : Anonymous

Querist : Anonymous (Querist)

28 November 2012 Payment is made to the party from whom sand,greet etc are purchased
Consider following two situation for my Query?

1.)Supplier of above material issue two invoice.One for Material and second for Carting exp?

2.)Supplier of above material issue only single invoice for both material and carting.

CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)
Follow

28 November 2012 in 1st situation
their are 2 option
1) if the company pays the carting exp (freight) directly to the transporter then it is covered by GTA

2) if the company pays the freight to the seller and in turn he pays to transporter then the company is not covered by GTA

in 2nd situation it is not covered by GTA

Querist : Anonymous

Querist : Anonymous (Querist)

28 November 2012 Do you have any material regarding the same?

Jayant Bothra

Jayant Bothra (Expert)
Follow

28 November 2012 Basically it depends upon the name on which invoice is made... if the invoice is in the name of the company then the company is covered under GTA even though the payment is moved from some other person... and if the invoice is in the name of another person then the company is not covered in GTA

Regds
CA JAYANT BOTHRA

Querist : Anonymous

Querist : Anonymous (Querist)

28 November 2012 Consider my case.
In my case Supplier is doing business of supply of Sand, greet etc.Supplier also provide transportation and for this transportation it recover Carting Exp from our client.

Supplier is issuing invoice in two ways.
1.)difference invoice for Material and Carting.
2.)single invoice for both material and carting?

Jayant Bothra

Jayant Bothra (Expert)
Follow

29 November 2012 The case of your do not fall into GTA.
GTA is an agency which receives the goods and delivers it to the consignee.
Your case is not of GTA it is simply delivery of goods. Moreover, GTA is liable to issue consignment note and in your case you wont be getting consignment note.
However, if seprate invoice is issued for cating expenses then after 01.07.2012 any service provided for consideration is liable to service tax. Hence, service tax is leviable @ 12.36% of the invoice amount.

No reverse charge mechanism will apply in this case.

You can refer to Rule 4B of Service tax rules, 1994.

Regds

CA JAYANT BOTHRA