Reverse charge on gta
This query is : Open
Vivek Kumar
(Querist)
07 June 2013
A pvt. ltd. company sells goods to another company and charged Rs 40000 as frieght. However it actually pays Rs 10000 to transportation comp.
while paying service tax they calculate the tax on 40000. On enquiry they told that they considered themself as a service provider that is why they are paying tax on 40000 not 10000. Are they correct? or they should pay tax on 10000 as reverse charge
while paying service tax they calculate the tax on 40000. On enquiry they told that they considered themself as a service provider that is why they are paying tax on 40000 not 10000. Are they correct? or they should pay tax on 10000 as reverse charge
Anoop Gupta
(Expert)
08 June 2013
Dear Vivek,
As per my understanding, the company is required to pay service tax on 40000 as out services and also required to pay Rs. 10000/- service tax on freight paid under reverse charge. However, the company may be eligible to CENVAT credit on Rs. 10000/- paid under reverse charge subject to the provisions of CCR 2004.
As per my understanding, the company is required to pay service tax on 40000 as out services and also required to pay Rs. 10000/- service tax on freight paid under reverse charge. However, the company may be eligible to CENVAT credit on Rs. 10000/- paid under reverse charge subject to the provisions of CCR 2004.
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