GTA Contractor

Dear Freinds



Regards


I request you to solve my problem-

 
One of my client has entered in to an Transporting agreement with Coal mining company which reads as under

   

“The Ex Serviceman Transport Company xyz Coal Carriers Private Limited should procure its own Tipping Trucks as per present requirement with provision to deploy more Tipping Trucks on the sole discretion of management for Transportation of Coal from the companies various quarries/faces/Bunkers/Surface/stock/CHPs/Feeder Breakers as per directives of the Chief general manager/General manager of the area on the terms and condition mentioned hereunder and the aforesaid Ex-Serviceman Transport companies Having agreed to the terms and condition offered to them.” 
 
The mining company is paying GTA on transport charges availing abatement of 75% and asked our client to give declaration that we shall not avail benefit of CENVAT credit in any account.
 
Now the case is : 
 
My Client xyz has arranged some trucks from Ex service men and deployed them in performance of above work (Main contract). 
 
however my client is neither paying any tax nor taking credit of any CENVAT whereas 
Deapartment is asking us to pay tax as GTA  on amount paid to individual truck owners who actually performed the work ?
 
there is clearly doble taxation on single service and coal company is not able to take credit of tax which has been asked to pay by us,  as they are taking benefit of abatement.
 
how can we avoid paying double tax????? 
 
Thanks and regards
 CA SAMEER SINGH

Replies (1)

Dear Sameer,

For GTA services, the liability for payment of service tax falls on the person who pays the freight. In the given case, Coal India will deposit the service tax on freight billed by your client. Morever, there is no service tax liability on your client for trucks hired and payments made to individual truck owners.

Moreover, the abatement clause has also been removed this year and hence there is no requirement of giving the declaration in the freight invoice by your client regarding non availment of cenvat credit.

I dont have the notifications to support the above readily available with me. Please search for the same and you will get your answers.

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