In case of GTA liability to pay S.T. is on the Company receiving Transportation Services. My queries are
1)Where in some cases Transporter Agency charge S.T. @10.30% on 25% of the transportation charges ( i.e. After 75% Abatement), whether the reverse charge mechanism is attracted to the service receiver also??
2)Whether the Service receiver can also avail the benefit of Abatement of 75% for discharging its liability related to reverse charge mechanism ??
05 July 2012
The payment of service tax tothe GTA shouldnotbe made as they are not liable. The company shouldpay the service tax and can claim 75% abatement. The rate now is 12.36% from 1.4.2012.
05 July 2012
if Transpotor charge service tax on bilty and recover from service receiver than service receiver can take cenvat of service tax on inward otherwise not.
05 July 2012
Procedure for availing abatement prescribed.- An abatement of 75% in taxable service of goods transport by road is available on the condition that the goods transport agency has not availed credit on inputs and capital goods used for providing taxable service and has also not availed benefit of Notification No. 12/2003- Service Tax, dated 20.6.2003 (vide Notification No. 32/2004-Service Tax, dated 3.12.2004 [now 1/2006-S.T., 1.3.2006]. It has been requested that in cases where liability for tax payment is on the consignor or consignee, the procedure as to how it should be confirmed by such consignor or consignee that the goods transport agency has not availed credit or benefit of Notification no. 12/2003- Service Tax may be prescribed. In such cases it is clarified that a declaration by the goods transport agency in the consignment note issued, to the effect that neither credit on inputs or capital goods [now input services also] used for provision of service has been taken nor the benefit of Notification no. 12/2003-Service Tax has been taken by them suffice for the purpose of availment of abatement by the person liable to pay service tax. [vide M.F.(D.R) Letter F.No. B1/6/2005-TRU, dated 27.7.2005- 2006 (1) S.T.R. (C48). Goods transport agency-Abatement of 75% -Withdrawal of letter confirmed.- Several references are received on the above issue. This Directorate had issued a clarification vide letter of even No. dated 30.3.2005 [2006 (1) S.T.R. C40)], that the benefit of Notification No. 32/2004-S.T., dated 3.12.2004 is not available in cases where the provision of Notification no. 35/2004-S.T., dated 3.12.2004 are applicable. However, said letter dated 30.3.2004of this office had been withdrawn by this Directorate vide letter of even No. dated 11.4.2005 [2006 (2) S.T.R. S34]
CAclubindia
