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
- Tax on Deemed Capital Gain
- Exiting partner in partnership firm in gst portal
- F & O PROFIT REPORTING FOR AY 2026-27
- Type of Capital Gain
- Regarding ITR filing with more value than showing in AIS/TIS
- Rental income of jointly held property
- ITR-3 File/Error Found
- ITR-Capital Gain
- Traces submitting correction statement error
- TDS _Long term Capital Gain ref.sec 214 Table 2
- Gst on travel by air for business purposes
- Loss of interest in PF transfer from EPFO to Trust
- Seeking Advice: High Tax Shortfall on Job Switch + Let-Out House Property Loss in FY 2025-26
- TDS offline utility
- TDS on rent received on hardship compensation being rent on redevelopment of building
- Housing Society-ITR5
- TDS on Rent received on redevelopment of building
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
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
