Service tax liability in case of gta service

Save Share

This query is : Resolved

CA Ankit Banka (Querist)

13 June 2013 A partnership firm (XYZ co.) registered as dealer (FSD/SSD) engaged in business of trading in Iron Ore Fines. It receives transportation service from various transport companies to transport the fines from the supplier(say A Ltd.) to the customer of the firm( say B Ltd.) directly and the transporter raise the transportation bill in the name of the firm (XYZ co) indicating therein that service tax liability will be on the consignee of the goods. The query is that who would be liable to pay service tax, firm(XYZ co.)or the customer of the firm (B Ltd.).

If the answer to the question is XYZ co. ,is it possible for the firm to shift the ST liability to its customer (B Ltd.) as XYZ co. is only a dealer.

C A Ankit Shetty

C A Ankit Shetty (Expert)

13 June 2013 Hi Ankit,

This is a typical issue. The service tax should be paid by the person who is making the payment to the GTA. Hence the Firm (XYZ).
However the firm can either collect the tax implicitly by adding tax to the price of the goods or explicitly by showing transportation in the invoice. In the later case service tax has to be collected from the buyer full tax and no abatement shall be available

Regards
Ankith
9980731897

CA Ankit Banka

CA Ankit Banka (Querist)

13 June 2013 Sir

Thanks for the quicker response. I wanted to know whether it is possible for the firm (as its a dealer)to pass on its responsibility to pay service tax liability into the account of Govt. to the buyer of those goods (i.e. B ltd).

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