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Gta and service tax

dineshsinghgaharwar (ass manager accounts) (73 Points)

05 August 2014

can anyone enlighten me on issue of gta after rcm

as per notification no 30 dt 20th june 2012 service reciever has to pay st on 100 %

whereas as per notification no26 dt.20th june 2012 abatment of 75 % is avilable for service receiver

can anyone explain with example what is current position of st on gta with respect to rcm ?

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7 Replies

CA.Ankur Khandelwal (Owner) (281 Points)
Replied 05 August 2014

Both notification applicable in case of GTA Service as per notification No. 30/2012 & 3/2013 service receiver have to pay 100% service tax on GTA and they can also avail the abatement 75% as notification 26/2012 effectively they have to pay service tax on 25% part

CA Saloni (Manager-Accounts & GST Consultant) (5124 Points)
Replied 05 August 2014

Agreed with ankur,

Both notifications are applicable, the service receiver has to pay 25% on 12.36% of the freight amount(ie 12.36*25%=3.09%)

maharaj (accountant) (165 Points)
Replied 05 August 2014

Dear Dineshsingh

RCM are two types one has 100% and other Partialcredit. As your requirement belongs to GTA then both RCM rule can be applicable. There have various rule but you you have know the below two things for Goods Transport Service.

1. Service tax liability arise when consignment note is issued.

2. Tax on 25% (abated value), if GTA does not avail Cenvat Credit, otherwise tax on 100% value.

So, as e.g. For 100% RCM=(Actual Freight value x 12.36%).

With abated value= (Actual Freight Value -75% abatement)

= on 25% freight value x 12.36%.

or direct 3.09% without abated value on actual freight.

Hope you understood.

Go Ahead.......

dineshsinghgaharwar (ass manager accounts) (73 Points)
Replied 06 August 2014

thnks.

one more query

1 ) so service receiver can claim cenvat credit for service tax paid (i.e.of 25 %) ?

2 ) How S.R. will be sure that GTA has not avialed cenvat credit for taking 75 % abatment ?

rakshita (Ca final student) (84 Points)
Replied 06 August 2014

Yes service receiver can claim cenvat credit of 25%service tax paid and gta cannot avail any cenvat credit since it does not pay any service tax.

Rohan (Audit Manager) (103 Points)
Replied 06 August 2014

Under RCM, service receiver has to pay service tax on GTA at 25% value. i.e. 3.09%

Credit will be available if GTA service obtained for input service (purchase of material). if GTA service obtained output service then credit will not be available.

Manoj Agarwal (Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com) (3456 Points)
Replied 07 August 2014

The person liable to pay freight to GTA is liable to pay tax at the effective rate of 3.09% after availing abatement of 75%. If the GTA service is eligible as 'input service' then Cenvat Credit can be claimed and utilized against excise duty or output service tax.

W.e.f. 11-07-2014, the service recipient of GTA service is not required to proof that the service provider (GTA) has availed cenvat credit or not as a condition for taking abatement of 75%. Prior to that, service receiver can take declaration to such effect from the GTA. Normally, it should had been printed/stamed on the consignment note itself.