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service tax on GTA

praveen reddy (practicing Chartered Accountant) (55 Points)

18 July 2008

Hi ,

can any one tell me the service tax applicablility in case of GTA and other situations.. what is the basic difference.??

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29 Replies

Gupta Mohit (CA) (824 Points)
Replied 18 July 2008

in case of GTA

as per rule 2(1)(d) of service tax rules 1994

the liability of payment of service tax in the credit of government is of service receiver and not of service provider

while in other cases the liability is of service provider........

for more see rule 2(1)(d) of service tax rules.

Subba Reddy (Employee) (24 Points)
Replied 18 July 2008

Originally posted by :Mohit Gupta
"	in case of GTA as per rule 2(1)(d) of service tax rules 1994 the liability of payment of service tax in the credit of government is of service receiver and not of service provider while in other cases the liability is of service provider........ for more see rule 2(1)(d) of service tax rules.	"

Among the above there is abatement of 75% of gross amount .And the service receiver has to pay service tax only on 25% of the gross amount at applicable rate.

Thanks

CA PRAMOD SARAOGI (Chartered Accountant) (1113 Points)
Replied 18 July 2008

Service Tax exemption for goods carriage to GTA

Central Government has issued notification No.29/2008-Service Tax, dated 26.06.2008 to exempt fully from levy of service tax on supply of transport vehicles (goods carriage) to a goods transport agency (GTA) to be used for transport of goods by road [section 65(105)(zzzzj) of the Finance Act, 1994]. It means suppliers of Trucks and other vehicles to Transport Companies are exempted from levy of Service Tax.

It has been stated that GTAs often provide services in relation to transportation of goods by road using the goods carriage obtained on rent or hire basis. The relief has been sought on various grounds inter-alia that the service tax paid on renting / hiring of goods carriage, without right of possession and effective control, could not be taken as input credit for payment of service tax towards GTA service.
In this year's Budget, services provided in relation to supply of tangible goods for use without transfer of possession and effective control were made a separate taxable service. Consequently, supply of goods carriages to goods transport agencies without transfer of possession was made taxable at the rate of 12.36 per cent (including education cess). Now the Notification No.29/2008-Service Tax, dated 26.06.2008 exempts fully the levy of service tax on supply of goods carriage (Transport Vehicle) to a GTA for use in transportation of goods by road. Truck owners who rent out their vehicles to goods transport agencies (GTAs) have got a major relief with the finance ministry clarifying that they are exempt from service tax. However, the goods transport agencies, who were also seeking exemption from service tax, are disappointed that they will have to pay the tax.

Services provided by a GTA in relation to transportation of goods is leviable to service tax under GTA service [section 65(105)(zzp)]. Service tax for the GTA service provided is payable only on 25% of the amount charged for providing the GTA service and the balance amount is exempt from levy of service tax. In view of this provision, GTAs are not entitled to take input credit under Cenvat Credit Scheme on goods and services used for GTA service. Moreover service tax for GTA services provided in seven specified cases is not required to be paid by the GTA service provider but by the person making payment towards the freight.

New Delhi, the 1st March, 2008
Notification No. 13/2008-Service Tax 11 Phalguna, 1929 (Saka)

G.S.R. (E).–In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service provided by a goods transport agency to any person in relation to transport of goods by road in a goods carriage, referred to in sub-clause (zzp) of clause (105) of section 65 of the Finance Act, from so much of the service tax leviable thereon under section 66 of the Finance Act, as is in excess of the amount of service tax calculated on a value equivalent to twenty five per cent. of the gross amount charged by the goods transport agency for providing the said taxable service.

2. This notification shall come into force on the 1st day of March, 2008.

New Delhi, the 26th June, 2008

Notification No. 29/2008 – Service Tax

G.S.R. (E).–In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service of supply of a goods carriage, without transferring right of possession and effective control of such goods carriage, referred to in sub-clause (zzzzj) of clause (105) of section 65 of the Finance Act, provided by any person to a goods transport agency for use by the said goods transport agency to provide any service, referred to in sub-clause (zzp) of clause (105) of section 65 of the Finance Act, to a customer in relation to transport of goods by road in the said goods carriage, from the whole of the service tax leviable thereon under section 66 of the Finance Act.

2. This notification shall come into force on the date of its publication in the Official Gazette.

(G.G. Pai)

Under Secretary to the Government of India

[F. No. 334/105/2008-TRU]

praveen reddy (practicing Chartered Accountant) (55 Points)
Replied 21 July 2008

thanks a lot guy. 'l surely find this helpful.

(Guest)

Kindly clear that service tax on frieght & cartage payment On Inward payment toTransporter & outward payment to Riksha,Trolly,Taxi [GTA] shuld be pay by Pvt.Ltd. co. If GTA exemption also for Pvt. ltd co. clear this

GOPALA KRISHNA TUMMA (Manager - Commercial) (38 Points)
Replied 04 August 2008

Originally posted by :Guest
"	Kindly clear that service tax on frieght & cartage payment On Inward payment toTransporter & outward payment to Riksha,Trolly,Taxi [GTA] shuld be pay by Pvt.Ltd. co. If GTA exemption also for Pvt. ltd co. clear this	"

The Goods transport agencies are required to issue a consignment note other than in cases where the service in relation to transport of goods by road is whollly exempted from service tax. Please go through the guidelines issued vide Circular No.M.F. (D.R.) Letter F.No.341/18/2004-TRU dated 17.12.2004

(Guest)

Tds is deducted on whole amount including service tax in Contract, Professional. But in case Service of GTA, service tax is not charged by Transport Agency, but provided by goods Receiver. What amount Tds is deducted on?

S.P.Mahanta (Internal Auditor) (647 Points)
Replied 09 September 2008

In case of contract/professional services TDS is deducted on the gross value of bil. In case of GTA , the service provider do not charge service tax in the bill and service tax is paid by the consignor/consignee who pays the freight. Hence, TDS in case of GTA is to be deducted only on the value of services rendered by service provider.

(Guest)

Pls give the details for the GTA Services provided in seven specified cases is not required to be paid by the GTA service provider but by the person manking payment towards the freight

(Guest)

In case of Consignment goods is transfered from Haryana to Punjab. Consignee sold goods outside Punjab & charged both Vat & Cst on Invoice. Vat on Sale @ 4% inclusive in Sale Price. Cst on Sale less Vat @ 3% invlusive in Sale Price. Please advice.

(Guest)

If half yoarly service tax return is not submitted to the Department on date '25th oct 2008' what will be the panalty and last date of submission of return?

(Guest)

Originally posted by :Guest
"	If half yearly service tax return is not submitted to the Department on date '25th oct 2008' what will be the panalty and last date of submission of return?	"

(Guest)

Dear Sir,

I Have a query about GTA.

If a service provider (GTA) doent issue a consigment note with his bills then to the consginee or consignee is liable to pay service tax or not?

Please help & oblige

Regards

P P Gogad

(Guest)

Query on GTA Service. We are the manufacturer & receive the GTA service on the goods carriage by Road. (1)What is the last date of payment of Service tax on GTA Service recd either on inward Service or outward service. Can we pay the service tax, when we pay the freight payment to GTA. Please help & oblige Regards, Alpesh