Please clarify my doubt regarding a case where the service provider in case of GTA has been collecting the service tax due from service reciever. As per the Reverse charge mechanism, service reciever is required to pay tax if it is a firm and file returns accordingly. What should the service reciever do in such case if the service reciever is a firm?
| Originally posted by : Manoj Agarwal | ||
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The service receiver should deduct the service tax from the bill of GTA and pay only the freight amount. Tax shall be paid directly by the GTA @ 3.09% to the government exchequer vide GAR - 7 Challan. |  |
Sir,
Kindly explain the liability of the service reciever if service tax is paid by the GTA. When will reverse charge mechanism be applicable in this case?
| Originally posted by : Manoj Agarwal | ||
|
The service receiver should deduct the service tax from the bill of GTA and pay only the freight amount. Tax shall be paid directly by the GTA @ 3.09% to the government exchequer vide GAR - 7 Challan. | |
Sir,
Kindly explain the liablity of the service reciever if service tax is paid by GTA. When will reverse charge mechanism be applicable in this case?
As you mentioned that you, a partnersip firm, are liable to pay freight to GTA, so RCM is applicable. The statutory liability is not extinguished if the GTA pays the service tax. The statutory liability of service receiver is not discharged. But, if you take certificate from GTA that they have paid the tax on GTA service, you may get relief from the courts, in case the department raise any demand from you.
Hi Experts,
Could anyone please help on my query regarding service tax: /forum/is-service-tax-applicable-for-me--275910.asp
I appreciate your help.
Thanks!
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If the GTA has collected the service tax on his bills then no liability of the receiver to pay service tax under RCM.
Source: Umasons Auto Compo Pvt. Ltd. Vs. Commissioner of Central Excise & Customs, Aurangabad [2014 - T IOL – 126 – CESTAT - MUM]
"It was held by the Hon’ble CESTAT that once the amount of Service Tax is accepted by the Revenue from the provider of GTA service, it cannot be demanded again from the recipient of the GTA service."
A partnership Firm XYZ (itself a GTA) receives services (of transportation of goods via road) from another ABC GTA Co. to transfer goods/products of PQR(Partnership firm) to MNO(Partnership Firm, Consignee) from Erode to Delhi of Rs30000/-. Freight is paid by XYZ to ABC and PQR has paid freight to XYZ without charging service tax. In this case who is liable to pay service Tax.
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