Service tax on gta and brokerage / commission

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Prakash Mundada (Querist)
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29 December 2013 Respected Experts,

We have a client which is a private company which pays freight to GTA and while issuing sale invoice to the customer it is collecting freight on it.

The Service tax treatment is:
The Service Tax @3.09% on Freight paid to GTA

and I have a doubt that whether the Service Tax @12.36% on Brokerage or Commission(difference between the actual freight collected and paid while sale)is payable by company or not.

And also I have a doubt that both the Service tax on GTA and Brokerage are eligible for Excise Credit

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
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29 December 2013 Definition : "goods transport agency" means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.

Hence in your case the company not covers under GTA definition hence when they charge to the customer they hae to charge ST @12.36%.
with respect to the Freight paid to GTA they have to pay ST under reverse charge at 3.09%

With respect to input you can claim the input of ST paid on freight under reverse charge, In case of the ST on the transportation charge you have to collect and pay to the department and customer will be eligible for input subject Rule 2(L)

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Prakash Mundada

Prakash Mundada (Querist)
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31 December 2013 Thank you very much sir for your wonderful reply,
But I have a doubt whether the Service Tax on GTA is eligible for Excise Credit or not for the company(because Freight Outwards is not eligible for Excise Credit only Freight Inwards is allowed for credit)

and also whether the company can claim the Excise credit for Service tax paid on Brokerage or not

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
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01 January 2014 The ST paid on GTA services under reverse charge is eligible for deduction but for freight outward it is not eligible but there are case laws which says you can also claim for Freight outward better don't claim for outward freight.
Brokerage also you can claim provided that brokerage is for providing output services.

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Prakash Mundada

Prakash Mundada (Querist)
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02 January 2014 Thank you very much Sir,

Thsi is the most clear explanation I have ever got

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