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Discussion > Service Tax > Queries >

Availment of cenvat credit & abatement on GTA service

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[ Scorecard : 43]
Posted On 13 December 2011 at 16:42 Report Abuse

Dear Seniors & Friends,


Today I have come to know according to a court judgement that abatement & cenvat credit on GTA Serice cann't be availed simultaneously.

For example Gross value of Transport Bill received for20000/-. Normally we avail 75% abatement on the value i.e.Rs  15000/- and on balance of5000/- is liable to pay service tax @ 10.3% i.e.Rs 515/- and the same amount is available for Cenvat Credit Input on service Tax.


Now please let me know the above service means GTA is under the new restriction or not. Please advise me whether it is correct practice according to the above example.




Accounts Executive


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CA CS Akashdeep Singh
Practicing CA

[ Scorecard : 1379]
Posted On 13 December 2011 at 23:48

Can you send me copy of that judgement or paste link here.

CA Prabhat Gupta
Manager (Indirect Taxes)

[ Scorecard : 811]
Posted On 15 December 2011 at 16:43

Dear Basu,

Service Tax paid on GTA service is a case where tax liability is discharged by the service recepient.  Abatement of 75% is also allowed, but Service Tax has to be paid in cash, that is, CENVAT credit could not be utilised to pay such service tax. Hence, in a sence CENVAT credit was not allowed to be utilised for payment of such tax. Now looking from the other side, GTA service is an input service for the consignee, hence credit of service tax paid on GTA service is allowed.

In my opinion, most of the notifications providing for abatement do not allow CENVAT credit on inputs & input services to the service provider if he claims abatement. Such notifications do not restrict Credit of service tax paid in such manner to the Recepient of service. In case of GTA it is the Service Recepient who pays Service Tax and hence credit is allowed.

Please quote the above judgement here so that thing could be understood and clarified properly.

Total thanks : 2 times


[ Scorecard : 43]
Posted On 15 December 2011 at 18:08

Thank you Sir to all of you for your valuable opinions. It is understood that if I am a service recepient in case of GTA and paid service tax as consignee I can avail input on the amt I have paid after calculating 75% abatement on the gross Transport Bill.


Am I clear ? Kindly clarify.


Thank you,


S P ;Basu

Accounts Executive


CA Prabhat Gupta
Manager (Indirect Taxes)

[ Scorecard : 811]
Posted On 16 December 2011 at 16:57

Yes Mr. Basu,

Your are clear but it is not necessary that the service tax is paid by the Consignee only. Even if Service tax on such service is paid by Consigner or the GTA itself, credit would be available to Consignee.

Please refer to Issue (b) under point No. 8.1 in the Link to the Circular No.97/8/2007 issued by Department:

Hope this clarifies.

jr accountant

[ Scorecard : 22]
Posted On 20 December 2011 at 09:14

Dear experts,


our is a proprietorship company , and we receive individual  transport bill @ 1570/- per trip and transporter bills us 42/- as service tax @ 10.3% .

as a consignee and been a proprietorship company ,are we supposed to pay any service tax ??

also can we avail the cenvat credit on 1570/- gross amount  and 42/- paid as ST ?


kindly assist .








CA Prabhat Gupta
Manager (Indirect Taxes)

[ Scorecard : 811]
Posted On 20 December 2011 at 13:05

Mr. Kamaak,

While going through Rule 2(1)(d) of Service Tax Rules, 1994, and considering the details given by you it seems that only where you are a Registered Dealer in Excisable Goods, the rule applies to you. Otherwise the GTA has to discharge the Tax Liability itself. As per Circular 97/8/2007, consignee is allowed to take credit of Service Tax on GTA, provided other conditions are satisfied.

jr accountant

[ Scorecard : 22]
Posted On 20 December 2011 at 14:04

Dear gupta sir,

Thanks for ur valueable feedback .

 we receive transport bills stating service tax @ 25% of the transporter charges ,are we supposed to pay the balance 75% to dept. as understand for proprietorship company it is the service provider only supposed to pay the service tax to dept and not the receiver ..please clarify .

also can we avail cenvat credit on 25% of ST paid on  transporter bill .


CA Prabhat Gupta
Manager (Indirect Taxes)

[ Scorecard : 811]
Posted On 20 December 2011 at 14:39

Mr. Kamaak,

GTA service is eligible for 75% abatement  on value of the service as per Notification 1/2006 - ST dated 01.03.2006. Hence you are not required to pay Service Tax on this 75%.

As already replied, in your case if you are a registered dealer in excisable goods, you are required to pay service tax, otherwise the service provider will have to bear the tax liability.

Yes , the consignee is allowed to take credit of this Service tax on Inward transport. Credit on outward freight is also allowed but only upto the extend of freight up to the place of removal ( depot, etc.).

CA Garav Gulati
Management Consultant

[ Scorecard : 105]
Posted On 20 December 2011 at 15:41



in the case of India cements cenvat credit of service tax paid on freight from place of removal to the detination has been allowed  by the High court can you please elaborate.



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