Issue is:
Consignor transports material by a GTA to a consignee.
Material is worth 100000, ST (budget 2012) 12360.
My questions:
1) Who is liable to pay the ST into the treasury?
2) How much cenvat credit (in Rs or %) is available for set off to the
a) Consignor
b) Consignee.
3) Is ST on GTA subject to any abatement?
Please reply.
Dear Rohit,
Firstly Service tax is payable on the amount of freight and not on the value of goods transported.
Secondly, an abatement of 75% is available on Freight,i.e., tax is required to be paid on 25% of the freight only.
Thirdly Service tax @ 12.36% will be applicable w.e.f. 01.04.2012 only.
Further refer Circular No. 97 / 8 /2007 dated 23rd August, 2007 for your queries.
For question 2: Please refer to new definition of input service as given in Notification No.3/2011-CE (NT) dated 01.03.2011, where inward transportation of inputs or capital goods and outward transportation upto the place of removal has been specifically included in the definition. In case of Consignor, where he is removing goods from a place other that place of manufacture, say a depot, then he can avail credit on frieght upto such place of removal. Beyond that point, the consignee can take credit of service tax on freight.
Aslo refer Para 8 of Circular No. 97 / 8 /2007 dated 23rd August, 2007 for more clear view.
Answer to your 3rd query is already given in my first reply...
thanks Prabhatji for your reply. It's a killa (cool) explanantion!!!!
CAclubindia
