06 June 2016
Sir, We are paying service tax after availing abatement 70%. The department plea is that you can avail abatement 70% only that condition if transporter/s has mentioned following declaration on his /thier GRs
"WE ARE NOT AVAILING CENVAT CREDIT" Please confirm us that the same is require or no.
07 June 2016
Provision of Act: Service tax is payable on 30% of amount charged in case of transport of goods by GTA. Cenvat Credit on inputs, capital Goods and input services used for providing taxable service shouldn't be taken by service provider.
Service provider need not prove that service provider has not availed Cenvat Credit.: Since service receiver is liable to pay service tax under reverse charge, he can pay service tax on 30% of value only if service provider has not availed Cenvat Credit. Service receipient will not be required to establish satisfaction of this condition by service provider- Para 4.1.6(i) of MF(DR) Letter No. 334/15/2014-TRU dated 10-07-2014.
If department is insisting for payment of service tax on 100%. Then ask for declaration from GTA that they are not taking Cenvat Credit on input.
Moreover, even GTA can not avail Cenvat credit on GTA services even if he wants. The reason is that as per rule 2(p) of CCR output service doesn't include a service where the whole of service tax is liable to be paid by the recipient of service.
CAclubindia
