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Applicability of gta - service tax

Nikunj Mahesh Raimangia (Senior Audit Executive) (82 Points)

26 June 2012

Need clarification on applicability of GTA - service tax on the below mentioned transaction.

A Limited company is engaged in selling Cattle feed which is exempt product.

Whether the transportation charges paid at the time of purchase of raw material as well as at the time of transporting the final finished product is taxable under the catagory of GTA for service tax?

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6 Replies

Shenba Associates (Partner) (115 Points)
Replied 26 June 2012

Its Taxable. Since you were providing service for transport is applicable at the prescribed rates.

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 26 June 2012

If the service provider is an individual, then you are the specified persons for making the service tax both at purchase and sales points. You can avail 75% abatement and pay for the balance amount. On the other hand if the service provider is a registered transport company and is collecting service tax in the bill itself, you need not pay the service tax.

Prateek Agarwal (Sr. Executive - Finance & Accounts) (1732 Points)
Replied 27 June 2012

Even though cattle feed is an exempted product, it has not been specifically exempted from GTA service tax applicability. Goods like milk, vegetables, egg etc. have been exempted.

Hence, you have to pay service tax after taking 75% abatement.