Service tax under rcm for gta

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JAYESH R SHAH (Querist)

07 May 2015 As per new amendment abatement on GTA is 70%, and balance 30% are liable for RCM.
Now the question how to pay service tax under if the bill received by the GTA IS already mention the service tax with the rate 3.708% (i.e after 70% abatement 12.36%)
Basic charges - 44640
Service Tax (70% abatement) - 1656
Total bill amount - 46296

now whether we have to pay 46296 to GTA
or only pay Rs. 44640/- to GTA and service tax to be paid under RCM Rs. 1656/-

CA Sandeep Kumar

CA Sandeep Kumar (Expert)

10 May 2015 Under reverse charge, the absolute liability for paying service tax on service receiver, hence you have to pay basic charges and deposit service tax to govt

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JAYESH R SHAH

JAYESH R SHAH (Querist)

11 May 2015 means for the bill receive for Rs. 46296 including service tax of Rs. 1656, we have to pay only 44640 to GTA and balance we have to pay under RCM of Rs. 1656
If this is right then we have ti issue any certificate to GTA for the payment of service tax

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

25 July 2025 Exactly! Here’s the correct approach for **GTA services under Reverse Charge Mechanism (RCM) with 70% abatement**:

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### How to handle the payment:

* **You pay Rs. 44,640** (basic charges excluding service tax) **to the GTA (transporter).**
* You **do NOT pay the Rs. 1,656 service tax to the GTA**, even if it’s mentioned on their invoice.
* Instead, **you (service receiver) pay the Rs. 1,656 service tax directly to the government under RCM** using GAR-7 challan.

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### About the certificate or declaration:

* Yes, you **should issue a certificate or a declaration to the GTA** stating that:

* You are paying only the basic amount.
* Service tax under RCM is payable and will be discharged by you directly.
* This is important so that the GTA doesn’t include the service tax amount in their sales or deposits twice.

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### Summary:

| Particulars | Amount (Rs.) |
| ------------------------------------ | ------------ |
| Basic charges payable to GTA | 44,640 |
| Service tax payable under RCM by you | 1,656 |
| Total (not paid to GTA) | 46,296 |

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If you want, I can help draft the **declaration/certificate format** you can issue to the GTA. Would you like that?

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