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Service tax on gta

526 views 1 replies

sudheer

Accountant

72 Points Joined February 2009

We are Charging Freight on our Invoice and we are paying GTA on actual freight paid, and we are getting reimbursed freight charges from the customer, my query is

Actual Freight Charges : Rs.5000/- (Rate contract with GTA)

Invoicing Freight Charges: Rs.5500/- (Customer will reimburse the same on raising the Invoice - no supporting documents required)

Whether we have to pay GTA on Rs.5,000 or Rs.5,500/-

Please reply.

Thanx in advance

Replies (1)

Prateek Agarwal

Sr. Executive - Finance & Accounts

1732 Points Joined February 2011

Dear Sir,

Rs 500 (5500-5000) is your profit and not actual payment to the GTA. Hence, not liable to tax.

As far as Rs 5000 is concerned, it is a re-imbursement from the customer. And he subsequently becomes the actual payer of GTA, hence, it would attract reverse charge mechanism (If the customer i.e. the consignee is any of the 7 mentioned parties).