Gta - exemption rs. 1500

Goods transport freight for single consignee up to Rs.750 and for single vehicle up to Rs.1500 is exempt.

Dear Deepak

X Ltd. hires the services of ABC (GTA) for transporting goods to Y Ltd. GTA charges freight Rs. 50000 to X Ltd..

X Ltd. is making a local sale to Y Ltd. in Punjab. VAT rate 5%. Value of goods Rs. 100000.

X Ltd. charges freight to Y Ltd. separately in the invoice.

What will be the entries in the books of X Ltd., Y Ltd. and GTA?

Regards

Sales

Y A/c  Dr

Sales   Cr

VAT Cr

Transport

Y A/c Dr

Transport Ch Cr.

GTA

Transport Ch Dr

GTA  Cr

In Books of Y  Reverse the above  Purchase A/c instead of Sales

Dear Shivani,

If the GTA a carrying goods for a single consignee, than the exemption limit is 1500 per vehicle.

If the GTA is carrying goods for more than one consignee, then the exemption can be claimed by each consignee whose freight is upto Rs. 750 per consignment.

In your example, X Ltd. who pays freight of Rs. 50,000 to GTA has to pay Rs. 1545 as service tax under reverse charge calcualted @ 3.09% of 50,000/-. 

Regards