19 February 2013
dear sir I have a query regarding gta service tax
suppose A (clearing agent ) receive some services from gta agency of rs. 1000/- and A raise bill to B (also small agent ) of rs. 1500/- and B raise the bill to his party of rs. 3000/-
gta will not going to charge service tax ? yes or no please suggest
so in this case how to calculate service tax after taking abatement of 75%
how to calculate service tax from each party's point of view
is everyone going to calculate service tax sepretally on his amount after taking abatement
19 February 2013
For GTA services Service receiver has to pay service tax (reverse charge machanism), hence GTA will not charge service tax.
Now in your situation A(Clearing agent)has to pay service tax because as per the law the person who makes the payment to GTA is liable to Service tax on 75% of the value paid to GTA. For more information refer article https://www.caclubindia.com/articles/reverse-charge-methodology-under-service-tax-16364.asp#.USOs6x2L_0o
20 February 2013
or B also going to charge service tax on C , he raise bill to C of rs. 3000/- he will charge service tax on this , on 25% or on full amount
20 February 2013
In the each stage for the difference amount is taxable at 12.36% because the amount paid to GTA is reimbursed and the difference is treated as commission hence only the Commission is taxable No double taxation.
can you please calculate the service tax from each party's point of view, ( means for A, B, C ) because how all these three party going to show service tax liability and how they will get cenvat on this
20 February 2013
because, I think for A liability become double, because he is a person who is directly getting service from GTA and he is charging to B after keeping comission
service tax calculation is as under
on gta's bill ( 1000*25% ) 250/- service tax 12.36% is rs. 31/-
and he raise bill to B of rs. 1500/- , on rs. 500/- service tax rs. 6/-
so is he going to pay 31/- and 6/- both amount
2) but in case of B he has a cenvat of rs. 6/- and when he will raise bill to C of rs. 3000/- he will charge service tax of rs. 371/-
and will get cenvat of rs. 6/-
please suggest the correct way to calculate service tax
20 February 2013
Service tax on GTA paid by A can be transferred by way of a refund to B and B can transfer to C that depends on Agrrement between the partis.
Assume When there is No refund of ST paid by A.
A-(1000*25%)=250*12.36%= Rs 30.9(ST) and collects ST from B on Brokarage of Rs 500(12.36% of 500=) Rs 61.8 Total ST paid by A is (30.9+61.8)=Rs 92.7
B- 1500 *12.36% = 185.4(ST on Brokarage) And he will take input of Rs 61.8 paid to A Net ST paid by B is( 185.4-61.8)= 123.6
Cross check: Total bill value under this transaction is Rs 3000 out of which Rs 1000 is GTA calculate ST on the same without any broker i,e on 1000 ST is Rs 30.9 and for balance 2000 ST is 247.2 Total ST is (30.9+247.2)= Rs 278.1
Now, check in the differnt stages tax paid it will tally i.e A-92.7 B-185.4 Total 278.1
21 February 2013
thanks ravikumar ji for your valuable answer ,
A) but sir when B raise bill to C of rs. 3000/- he will charge service tax on rs. 1500/- ( brokerage )only as per your explanation , how he will going to show the invoice amount means for e.g. he will show as given below
because when we raised bill to a party they will ask for why you charge service tax on 1500/- not on rs. 3000/- ( so we have to mention sepretally )
B) we are clearing and forwarding agent but in our ST-2 certificate we had registered for two services 1) clearing and forwarding agent 2) good transport by road
so shall i need to file the service tax return for GTA service also, because in so many cases we are directly receiving the services from GTA and we billed to our overseas customer so we can not charged service tax to them but we are liable to pay service tax as service receiver under reverse charge mechanism ( but normally in our case the GTA from which we are receiving transportation services they are small truck owner or driver ) so it is required to pay under GTA and need to register under GTA?
and second thing if suppose we have only one registered service that is clearing and forwarding agent and we received some services from GTA so at that time it is required to get registered under GTA to pay the service tax under reverse charge mechanism and add services in our ST-2 certificate
in above explanation when B raised bill to C of rs. 3000/- he will charge service tax on rs. 1500/- but didn't you think he can get the amount of brokerage profit after getting invoice when he will see in how much amount he is not charging service tax
C can asked to him for provide supporting even though C does not have original bill of transportation he also getting done through another agent
if suppose A receive service from GTA of rs. 1000/- and and he charge to B only 1000/- and for supporting A provide original bill of transportation to B , now who is liable to pay service tax
please clear one point it is need to add service as gta for paying service tax, if i am already registered as clearing forwarding agent because i have to file service tax return before 25th march
CAclubindia
