Point of taxation in gta service

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Nishant Alok

Chartered Accountant

97 Points Joined January 2008

Dear All

My company is selling goods all over India & pays the transportation charges for dispatching the goods to customers.Now the situation is that goods is delivered on 25th July to our customer but we received the lorry receipt as a proof of delivery on 6th August.Now since payment of service tax on the GTA service is ours,& the goods delivered in July.

So, kindly advice me in which month liability for Service tax arises as now we have to give service tax on bill basis instead of payment basis.

I my view we can't delay in entry on the point that we are receiving the LR copy after 10 days & so we are doing entry in the date on which the goods are delivered to customer & depositing service tax with late fine.

Please advice.

Replies (3)

CA Madhvi

...Blissful...

1658 Points Joined November 2007

POT rules dont apply to reverse charge mechanism ....it falls in one of the exceptions......so service tax is to be paid when gta payment is made........so no worry

CA Unnikrishnan Nair N

Chartered Accountant

2083 Points Joined February 2011

For taxes payable under reverse taxing, date of payment is the point of taxation.

Dayal

Gen. Manager - Indirect Taxation

3451 Points Joined October 2007

In respect of service tax payable by recipient of service notified u/s. 68(2) of Finance Act, 1994

In case of the services specified in Rule 2(1)(d)(4) of the Service Tax Rules, like GTA, insurance, import of services; etc., Point of Taxation shall be the date on which payment is made to service provider.

However, if such payment is not made within the period of six months of the date of invoice, the Point of Taxation shall be determined as if this rule does not exist and the general rule will apply.