Rcm on gta

This query is : Resolved

P.Harish (Querist)
Follow

16 October 2012 Dear Expert

Ser.notification No 26/2012 & No 30/2012 dt 20-6-12 is geting confused on the matter of Service of goods transport agency in relation to transportation of goods,Noti.No 26 says 25% & Noti.No 30 says 100%, now my question is that

Our is Pvt Ltd excisable unit , what would be tax liability in GTA case 0n 25% OR on 100% , Is RCM is applicable ,Please eleborate in details urgently-------.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
Follow

17 October 2012 N/N 30/2012 is for reverse charge mechanism
N/N 26/2012 is for abatement.

N/N 30/2012 specifies the services on which reverse charge is applicable and the percentage of liability to be borne by the service recipient.

N/N 26/2012 specifies the abatement (portion of taxable value exempt from tax).

Conclusion:
1. reverse charge mechanism is applicable on GTA.
2. 100% liability is to be borne by the service recipient.
3. While computing liability, 75% is exempt and liability will be calculated only on 25% of the invoice value.

Example:
Invoice amount Rs. 10,000/-
Reverse charge is applicable and accordingly 100% liability is to be borne by the service recipient.

Computation of liability:
Invoice Amount Rs. 10,000
Less: Abatement Rs. 7,500
Taxable Value Rs. 2,500

Service tax liability = 2,500*12.36% = Rs. 309

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now