GTA - Reverse Charge

This query is : Resolved

CA-ASPIRANT (Querist)
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12 December 2009 Dear Sir,

Our client is availing services from Best roadways ltd who is issuing consignment note to our client and our client is paying freight to best roadways

Best roadways is raising bill with service tax at abated late. and our client is paying freight alongwith service tax charged on the bill, to Best Roadways ltd.

under Reverse Charge
as per rule 2(1)(d) of service tax rule,

our client must deposit service tax to the Service tAx authority directly irrespective of thresold limit of Rs. 10,00,000.

Pl suggest

Thanks in advance

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ADITYA

ADITYA (Expert)
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12 December 2009 Please note that the first liability to pay service tax under "GTA" is of the user of the services under certain categories. Your client is required to pay service tax directly to the Govt Authority, (irrespective of threshold limit of Rs Ten lacs), provided is under the Specified Category.

SANJAY JAIN

SANJAY JAIN (Expert)
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12 December 2009 In case your client is falling under any specified category of â€œPERSON LIABLE FOR PAYING THE SERVICE TAXâ€ as prescribed in Rule 2(d)(v) of the Service Tax Rules 1994, then invariably your client is liable to pay tax on the payment of freight amount to the GTA. As in this mechanism, GTA is not under obligation to pay tax or to take registration.

Moreover your client is not to wait for 10 lakh exemption limit as this limit provided by Notification No. 6/2005-ST dated 01.03.2005 is not applicable in respect of which onus of payment of tax has been shifted upon the recipient in terms of provisions of Section 68(2).

For further query, feel free to write sanjayinfbd@yahoo.com (M-09350048731).

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