Vces its urgent
This query is : Resolved
30 December 2013
Our GTA has already paid service tax on 25%of the freight charges for the period 1.07.12 to 31.12.12.So whether we need to pay the service tax on the same under VCES ?
30 December 2013
NO
IF GTA ITSELF PAID SERVICE ON FREIGHT CHARGES
THEN YOU HAVE NOT NEED TO PAY TAX BUT ONCE YOU VERIFY SUCH GTA IS PAID SERVICE TAX OR NOT ON SERVICE WHICH YOU RECEIVE IF HE NOT PAID THEN IT IS YOUR LIABILITY
FOR YOUR KIND INFORMATION IF YOU REGISTERED UNDER FACTORY ACT, OR A PARTNER SHIP FIRM, OR CO-OPERATIVE SOCIETY OR A COMPANY THEN IT IS YOUR LIABILITY TO REGISTERED UNDER SERVICE TAX AND PAID TAX THEIR ON, BUT THAT IT NO PROBLEM IF YOU NOT PAID TAX AND GTA PAID TAX
BUT IN CURRENT YEAR ONWARD YOU TAKE SUCH LIABILITY IF YOU COVERED ABOVE
IF GTA ITSELF PAID SERVICE ON FREIGHT CHARGES
THEN YOU HAVE NOT NEED TO PAY TAX BUT ONCE YOU VERIFY SUCH GTA IS PAID SERVICE TAX OR NOT ON SERVICE WHICH YOU RECEIVE IF HE NOT PAID THEN IT IS YOUR LIABILITY
FOR YOUR KIND INFORMATION IF YOU REGISTERED UNDER FACTORY ACT, OR A PARTNER SHIP FIRM, OR CO-OPERATIVE SOCIETY OR A COMPANY THEN IT IS YOUR LIABILITY TO REGISTERED UNDER SERVICE TAX AND PAID TAX THEIR ON, BUT THAT IT NO PROBLEM IF YOU NOT PAID TAX AND GTA PAID TAX
BUT IN CURRENT YEAR ONWARD YOU TAKE SUCH LIABILITY IF YOU COVERED ABOVE
31 December 2013
Sir you wouid NOT be liable to pay service tax under reverse charge only if you are an individual or a HUF .
And once you are liable to pay under reverse cahrge,even if the GTA haspaid the service tax,you have to pay it again in cash with Service tax authority.
And once you are liable to pay under reverse cahrge,even if the GTA haspaid the service tax,you have to pay it again in cash with Service tax authority.
31 December 2013
Dear annu ji
please provide relevent provision
and is any case if decided
please provide relevent provision
and is any case if decided
03 August 2025
You're urgently seeking clarity on a common confusion under the reverse charge mechanism (RCM) in the context of GTA (Goods Transport Agency) services and the VCES 2013 scheme.
Let’s settle it with authority:
🔍 Your Question:
If the GTA has already paid service tax on 25% of the freight charges (after abatement), for the period 1.7.2012 to 31.12.2012, do you, as the recipient, still need to pay again under reverse charge or VCES?
✅ Answer: No, you are NOT liable again—
Only one party (either the GTA or the recipient under RCM) is liable to pay service tax—not both.
But here's the full legal position:
🧾 Relevant Legal Provision:
Under Notification No. 30/2012-ST dated 20.06.2012, effective from 1 July 2012, the reverse charge mechanism applies to GTA services only if:
The service is provided by a GTA, and the recipient is specified (e.g., a factory, company, partnership firm, etc.)
Under this notification:
100% of the service tax is to be paid by the recipient (you), if reverse charge applies.
The GTA is not supposed to pay in such cases.
🔁 BUT: If GTA has already paid the tax:
Then, you are not liable to pay again, provided:
The GTA charged and paid service tax correctly;
You have evidence (invoice + payment + tax challan) to prove this;
The GTA was not exempt or outside the purview of RCM.
⚖️ Judicial View / Case Law Support:
Although VCES was a special amnesty scheme and few VCES-specific cases reached higher courts, under the general service tax framework, the principle has been:
"Double taxation is not permitted. If the service tax is already paid by the service provider and accepted by the department, the liability under reverse charge does not survive."
Relevant judicial opinions (pre-GST, under service tax) include:
CCE v. Panchmahal Steel Ltd. [2014 (34) STR 294 (Tri.-Ahmd)]
It was held that if the service provider has discharged the tax liability, then recipient is not liable under reverse charge.
🚩 Important Caveats:
If your organization falls under reverse charge eligibility (factory, partnership, company, etc.), you must not assume exemption just because GTA claimed they paid.
You must verify:
Tax was actually paid by GTA,
Tax was paid under correct category (GTA),
And you are not claiming CENVAT on the same unless legally permitted.
🧾 Under VCES:
If you can prove that tax was already paid by GTA, then:
You should not declare or pay again under VCES for that amount.
VCES is for unpaid/undeclared tax dues only.
So, include in your VCES declaration only that portion where GTA did not pay and you were liable under reverse charge.
✅ Summary:
Scenario Who Pays? Your VCES Liability
GTA paid tax properly GTA ✅ No liability under VCES
GTA didn’t pay tax You (RCM) ✅ You must declare and pay under VCES
You’re an individual/HUF Not covered under RCM ❌ No liability
Let’s settle it with authority:
🔍 Your Question:
If the GTA has already paid service tax on 25% of the freight charges (after abatement), for the period 1.7.2012 to 31.12.2012, do you, as the recipient, still need to pay again under reverse charge or VCES?
✅ Answer: No, you are NOT liable again—
Only one party (either the GTA or the recipient under RCM) is liable to pay service tax—not both.
But here's the full legal position:
🧾 Relevant Legal Provision:
Under Notification No. 30/2012-ST dated 20.06.2012, effective from 1 July 2012, the reverse charge mechanism applies to GTA services only if:
The service is provided by a GTA, and the recipient is specified (e.g., a factory, company, partnership firm, etc.)
Under this notification:
100% of the service tax is to be paid by the recipient (you), if reverse charge applies.
The GTA is not supposed to pay in such cases.
🔁 BUT: If GTA has already paid the tax:
Then, you are not liable to pay again, provided:
The GTA charged and paid service tax correctly;
You have evidence (invoice + payment + tax challan) to prove this;
The GTA was not exempt or outside the purview of RCM.
⚖️ Judicial View / Case Law Support:
Although VCES was a special amnesty scheme and few VCES-specific cases reached higher courts, under the general service tax framework, the principle has been:
"Double taxation is not permitted. If the service tax is already paid by the service provider and accepted by the department, the liability under reverse charge does not survive."
Relevant judicial opinions (pre-GST, under service tax) include:
CCE v. Panchmahal Steel Ltd. [2014 (34) STR 294 (Tri.-Ahmd)]
It was held that if the service provider has discharged the tax liability, then recipient is not liable under reverse charge.
🚩 Important Caveats:
If your organization falls under reverse charge eligibility (factory, partnership, company, etc.), you must not assume exemption just because GTA claimed they paid.
You must verify:
Tax was actually paid by GTA,
Tax was paid under correct category (GTA),
And you are not claiming CENVAT on the same unless legally permitted.
🧾 Under VCES:
If you can prove that tax was already paid by GTA, then:
You should not declare or pay again under VCES for that amount.
VCES is for unpaid/undeclared tax dues only.
So, include in your VCES declaration only that portion where GTA did not pay and you were liable under reverse charge.
✅ Summary:
Scenario Who Pays? Your VCES Liability
GTA paid tax properly GTA ✅ No liability under VCES
GTA didn’t pay tax You (RCM) ✅ You must declare and pay under VCES
You’re an individual/HUF Not covered under RCM ❌ No liability
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