Reverse charge

This query is : Resolved

Arun Kumar (Querist)
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27 January 2014 A Individual service provider as GTA provided its services to a company. Individual Service provider is not registered in service tax but service receiving Company paid 75% ratio service tax liability to department. Is the company liable to pay 75% ration service tax of unregistered individual GTA??

Please provide me a suitable answer with notification or article..

AVTAR SINGH

AVTAR SINGH (Expert)
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27 January 2014 Services of goods transport agency in relation to transportation of goods are taxable @3.09% instead of 12.36% provided CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been claimed by service provider. In your case the service provider is not registered with service tax department. You take a certificate from him that he will not claim cenvat.
You have to deposit 100% of service tax (3.09%)with service tax department and not 75%.

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Arun Kumar

Arun Kumar (Querist)
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28 January 2014 Under Reverse charge GTA service receiving company liability is 75% of Service Tax amount. Is the comapany liable to pay 75% of service tax on bill amount to department and how does take credit of this payment(75% of Service Tax amount) ??

AVTAR SINGH

AVTAR SINGH (Expert)
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28 January 2014 As already clarified you have to deposit 100%. Where have you taken the figure of 75% from. Actually 75% is abatement if no Cenvat is claimed by service provider. So he will charge 25% as per Notification 26/2012.

Further as per Notification 30/2012 you have to pay 100% of service tax. So in your case if 3.09% is charged, you have to deposit 3.09%.

Arun Kumar

Arun Kumar (Querist)
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28 January 2014 Means its just like a TDS(deducted TDS before payment to client). Company deposit 3.09% service tax to govt. and remaining net amount paid to GTA service provider.??
Please also tell me whether the company paying service tax in this regard take credit 3.09% in its books??
If yes, then on tax payment basis or accrual basis in books??

Arun Kumar

Arun Kumar (Querist)
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28 January 2014 Please also tell me GTA is ntt registered in service tax and not charge service tax on Invoice to company.
Whether the company liable to pay service tax 3.09% to govt under reverse charge??

AVTAR SINGH

AVTAR SINGH (Expert)
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28 January 2014 1. Whether the GTA is regd. or not, whether GTA is having turnover of 10 lac or not, you have to deposit 3.09% (as per Reverse Charge Mechanism)with the Govt. and pay Rs.100 to GTA. It is not like TDS where deduction is made from the bill amount. It is additional burden on Service Receiver and payment of Rs.3.09% is to be deposited over and above the bill amount (excluding service tax).
2. Firstly make payment on due basis, then you can claim cenvat for this amount.

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