Service tax on gta

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 March 2015 Dear sir
i have paid 1000 freight to transport company please tell me will i have to pay 25% service tax under RCM and one of the tax expert has suggest no need to pay 25% ST under RCM if freight is paid below 1500/-
please clarify my above Query..

shubham shukla

shubham shukla (Expert)

31 March 2015 No. Mega Exemption Notification No. 25/2012-ST has exempted low value consignments from the levy of service tax, as follows: (a) Where the gross amount charged for the transportation of goods on a consignment transported in a single goods carriage is upto Rs 1,500/-; or (b) Where the gross amount charged for transportation of all such goods for a single consignee in the goods carriage is upto Rs. 750/-

Note: Many authors have interpreted that the exemption of higher limit of Rs. 1500 is available if the goods carriage is transporting goods of single consignee. But in my view, the higher exemption is available even when the goods carriage is transporting goods of more than one consignee, if the gross amount charged from all the consignee’s for single goods carriage is upto Rs. 1500.

ILLUSTRATION:
A company receives goods from a GTA in a truck. No other goods are loaded in that truck. The company pays freight of Rs. 1500/- to GTA. No service tax is payable by any person on this consignment as it is exempted.
ILLUSTRATION:
A company receives goods from a GTA in a truck. Some other goods not belonging to the company are also loaded in the truck. The company pays freight of Rs. 900/- to GTA. The freight of other goods is Rs. 500/-. Service Tax is not payable by the company on this consignment as the total freight for the truck is Rs. 1400 (1500). Freight paid by company is Rs. 900 (>750). So, exemption is not available and the company should pay service tax on Rs. 900/-!!

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