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Gta service by a company to individual

rajeesh.mv (CA Final) (46 Points)

28 June 2012

HELLO SIR ,

If a company provides goods transport services to individual .. who is liable to pay service tax .........Service receiver or service provider ...........words used in section 2 is confusing ......please help

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6 Replies

rajula gurva reddy (Manager) (420 Points)
Replied 28 June 2012

Whoevar pays freight have to pay Service Tax

CMA Ashutosh Kumar Gupta (Unit Financial Controller) (1015 Points)
Replied 28 June 2012

The liability to pay Service Tax in case of GTA services has been casted upon the SERVICE RECEIVER (SR)-100% under Reverse Charge Mechanism but if SR is an Individual or HUF i.e. other than as prescribed under the provisions i.e. where the consignor or the consignee is,—
(a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948);
(b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India;
(c) any co-operative society established by or under any law;
(d) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder;
(e) any body corporate established, by or under any law; or
(f) any partnership firm whether registered or not under any law including association of persons;

...in my opinion, in consonance with the quriest, service tax liability can not be discharged by an Individual or HUF who is other than the consignee so prescribed hence SP should be made liable to pay Service Tax if he charges so in the invoice raised and reverse charge mechanism should stand modified to that extent.

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Prateek Agarwal (Sr. Executive - Finance & Accounts) (1732 Points)
Replied 28 June 2012

As per reverse charge mechanism, the one paying freight shall be liable to service tax.

rajeesh.mv (CA Final) (46 Points)
Replied 28 June 2012

Originally posted by : CMA Ashutosh Kumar Gupta

The liability to pay Service Tax in case of GTA services has been casted upon the SERVICE RECEIVER (SR)-100% under Reverse Charge Mechanism but if SR is an Individual or HUF i.e. other than as prescribed under the provisions i.e. where the consignor or the consignee is,—
(a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948);
(b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India;
(c) any co-operative society established by or under any law;
(d) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder;
(e) any body corporate established, by or under any law; or
(f) any partnership firm whether registered or not under any law including association of persons;

...in my opinion, in consonance with the quriest, service tax liability can not be discharged by an Individual or HUF who is other than the consignee so prescribed hence SP should be made liable to pay Service Tax if he charges so in the invoice raised and reverse charge mechanism should stand modified to that extent.

.................. I think ur view point is correct.........but again , is it mandatory to collect service tax by the company , and also what about SSI exemption to the company

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 28 June 2012

If the company is registered under GTA service, he can also dischrge the service tax liability after availing the75% abatement. Then there is no liability for the service receiver/consignee/consignor as the case may be.

On the other hand if the Invoice/Lorry way bill indicates, "Service tax will be paid by the consignee" then the person paying the freight amount is liable to pay. This is the understanding.

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