Service tax - gta liability?
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
14 November 2013
If GTA - Service provider sub contrct to other GTA Co than who will be liabile for Service-tax, all parties corporate entity
15 November 2013
their are certain services that are exempt: https://pib.nic.in/newsite/erelease.aspx?relid=46410
Not sure if the services offered by your sub-contractor gets covered.
Not sure if the services offered by your sub-contractor gets covered.
24 July 2025
Here’s a clear explanation regarding service tax liability on GTA subcontracting:
Scenario:
A GTA (Goods Transport Agency) service provider subcontracts the transportation to another GTA company.
Question is: Who is liable to pay service tax?
Service Tax Liability in GTA subcontracting:
Primary GTA service provider (the one who contracts with the customer) is primarily liable to pay service tax on the full service value charged to the customer.
The sub-contracted GTA company (the one actually performing the transport) is also liable to pay service tax on the amount it charges the primary GTA for the subcontracted service.
Therefore, both the primary GTA and the subcontracted GTA are separately liable to pay service tax on their respective service amounts.
Explanation:
The primary GTA is liable to pay service tax on the total amount charged to the customer (including the amount paid to the subcontractor).
The subcontractor GTA is liable to pay service tax on the amount it charges to the primary GTA.
The primary GTA can avail input credit of the service tax paid to the subcontractor.
Example:
Customer pays Rs. 100,000 to primary GTA.
Primary GTA pays Rs. 60,000 to subcontracted GTA for carrying out the transport.
Primary GTA pays service tax on Rs. 100,000.
Subcontracted GTA pays service tax on Rs. 60,000.
Primary GTA can claim CENVAT credit on service tax paid by subcontracted GTA.
Exemptions & Clarifications:
Certain GTA services are exempt, such as services by a GTA by road in a goods carriage in certain cases (refer to the notification link you shared).
Check the specific nature of your service and exemptions to verify applicability.
Conclusion:
Both the primary GTA and subcontracted GTA are liable for service tax on their respective charges.
The primary GTA gets credit for the service tax paid to subcontractor, avoiding double taxation.
Scenario:
A GTA (Goods Transport Agency) service provider subcontracts the transportation to another GTA company.
Question is: Who is liable to pay service tax?
Service Tax Liability in GTA subcontracting:
Primary GTA service provider (the one who contracts with the customer) is primarily liable to pay service tax on the full service value charged to the customer.
The sub-contracted GTA company (the one actually performing the transport) is also liable to pay service tax on the amount it charges the primary GTA for the subcontracted service.
Therefore, both the primary GTA and the subcontracted GTA are separately liable to pay service tax on their respective service amounts.
Explanation:
The primary GTA is liable to pay service tax on the total amount charged to the customer (including the amount paid to the subcontractor).
The subcontractor GTA is liable to pay service tax on the amount it charges to the primary GTA.
The primary GTA can avail input credit of the service tax paid to the subcontractor.
Example:
Customer pays Rs. 100,000 to primary GTA.
Primary GTA pays Rs. 60,000 to subcontracted GTA for carrying out the transport.
Primary GTA pays service tax on Rs. 100,000.
Subcontracted GTA pays service tax on Rs. 60,000.
Primary GTA can claim CENVAT credit on service tax paid by subcontracted GTA.
Exemptions & Clarifications:
Certain GTA services are exempt, such as services by a GTA by road in a goods carriage in certain cases (refer to the notification link you shared).
Check the specific nature of your service and exemptions to verify applicability.
Conclusion:
Both the primary GTA and subcontracted GTA are liable for service tax on their respective charges.
The primary GTA gets credit for the service tax paid to subcontractor, avoiding double taxation.
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