Gta & reverse charge mechanism
This query is : Resolved
07 December 2012
Dear Experts,
I understand that if a company avails the service of GTA service, it has to pay the service tax under Reverse Charge Mechanism, in this regard i have following queries
1. Can such company can avail the abatement of 75%?
2. if such abatement is availed and tax is paid in cash, can such paid amount again be utilised as credit?
3. if such GTA is not registered for ST (for any reason), will there be a liability on the company to pay ST under Reverse Charge Mechanism?
4. Say such company is a middleman and not the ultimate beneficiary of GTA service, will Reverse Charge Mechanism apply to the company?
I understand that if a company avails the service of GTA service, it has to pay the service tax under Reverse Charge Mechanism, in this regard i have following queries
1. Can such company can avail the abatement of 75%?
2. if such abatement is availed and tax is paid in cash, can such paid amount again be utilised as credit?
3. if such GTA is not registered for ST (for any reason), will there be a liability on the company to pay ST under Reverse Charge Mechanism?
4. Say such company is a middleman and not the ultimate beneficiary of GTA service, will Reverse Charge Mechanism apply to the company?
07 December 2012
1. Yes the company can avail abatement benefit.
2. CENVAT credit can also be claimed.
3. The liability of service provider and service recipient is independent of each other. The service recipient is liable to pay service tax under reverse charge even if the service provider is not liable.
Accordingly the company is liable to pay service tax even if the GTA is not registered.
4. If the invoice is in the name of the company, then the company is liable to pay service tax.
If the company is a middleman, it should ask the GTA to bill directly to the ultimate user and also collect the freight from such user.
2. CENVAT credit can also be claimed.
3. The liability of service provider and service recipient is independent of each other. The service recipient is liable to pay service tax under reverse charge even if the service provider is not liable.
Accordingly the company is liable to pay service tax even if the GTA is not registered.
4. If the invoice is in the name of the company, then the company is liable to pay service tax.
If the company is a middleman, it should ask the GTA to bill directly to the ultimate user and also collect the freight from such user.
07 December 2012
Siddhartha
Nicely & ver well explained.
Thanks//Vaibhav
Nicely & ver well explained.
Thanks//Vaibhav
07 December 2012
Thank you siddhartha,
in case of point no.4, if the company as a middleman keep its margin while billing to customer, can it pay the tax under reverse charge mechanism and later again pay the tax on re-billed amount by using the abatement (i. e is there a condition that to avail the abatement of 75%, he should be an actual transporter?)
in case of point no.4, if the company as a middleman keep its margin while billing to customer, can it pay the tax under reverse charge mechanism and later again pay the tax on re-billed amount by using the abatement (i. e is there a condition that to avail the abatement of 75%, he should be an actual transporter?)
07 December 2012
It is not compulsory for the service recipient to be registered as a transporter.
The abatement benefit is available to all assessees.
The abatement benefit is available to all assessees.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- CAPITAL GAIN BASE ON NOTIFICATION
- Unregistered suppliers utility
- ITDS U/S.194T of Firm
- NRI starting business in India
- Difference between Date of Payment and Date of Deduction?
- Journal entry of busniess expenses
- GST not cancelled by tenant
- FORM 141 SDV query
- URGENT-Eligible leaves being shown as 24 days for 3 years Articleship instead of 156 days in 108
- Cash balance limit and property purchases limit
- Taxable or Tax exempt
- How to pay remaining amount of TDS after due date?
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
