Prabha (officer accounts) (69 Points)
03 December 2013Pls clarify,
Our supplier has supplied marbles. For transporation he hired a transporter on his own.
In his bill, the transporter consignment note in attached. The freight amount is reimbursed at actuals.
However in the consignment note, the transporter has indicated that service tax is payable by the consignee i.e Us
The supplier has not charged any service tax on the freight portion.
Are we liable to remit service tax ?
aishwarya s raghavan
(student)
(224 Points)
Replied 03 December 2013
Dear Prabha,
The GTA is not liable to pay service tax. Check if there is any service tax registration no quoted in his bill and there is any information if he is availing abatement. If no such information is given, then you have to pay service tax on such bill amount. You can avail 75% abatement on the bill amount and pay service tax on 25% of the bill. Note, you are not eligible to avail input credit on the service tax paid.
Jinesh Shah
(freelancing, industry)
(105 Points)
Replied 03 December 2013
Well Prabha, as per the new reverse charge mechanism introduced in the service tax law and from the details given by you, YES you are liable to pay the service tax on the GTA services received by you.
The term 'Remit' used by you is a bit confusing.
Do you mean 'remit' to the service provider? If YES then let me clarify that you need not remit any thing to the service provider except what is mentioned in the consignment note. The service tax calculated on that amount will be paid to the government.
For more info follow the link below
CA PRIYUL SHAH
(JOB)
(901 Points)
Replied 03 December 2013
Hi,
You are required to pay service tax as per reverse charge mechanism. You are eligible for abatement under notification 26\2012-S.T. i.e. 25% value taxable.
You can utilize this payment as a CENVAT credit for Service Tax Liability in future.
Prabha
(officer accounts)
(69 Points)
Replied 03 December 2013
Pls note that the transporter is not directly billing to us.
The supplier is charging from us wherein along with supply cost he is charging for transporation also. As a supporting he is attaching the transporter's bill and consignment note. The transporter is getting payment from the supplier and not from us. However he has indicated in his consignment note that service tax will be payable by us (Consignee option ticked).
I understand that the liability arises only when we make the freight payment to the GTA. Now as the supplier is paying to him, would we be still liable to pay or not??
aishwarya s raghavan
(student)
(224 Points)
Replied 03 December 2013
Prabha!
Now that you have explained the transaction flow, to my knowledge you need not pay service tax mainly because, the transport bill is not in your name.
| Originally posted by : Prabha | ||
 |
Pls note that the transporter is not directly billing to us. The supplier is charging from us wherein along with supply cost he is charging for transporation also. As a supporting he is attaching the transporter's bill and consignment note. The transporter is getting payment from the supplier and not from us. However he has indicated in his consignment note that service tax will be payable by us (Consignee option ticked). I understand that the liability arises only when we make the freight payment to the GTA. Now as the supplier is paying to him, would we be still liable to pay or not?? |
 |
The statute requires the payer of freight to pay the service tax amount. In case the supplier has paid the freight, they are liable to pay the service tax and can claim reimbursement of the same from you.
Hence you will not be held liable since you have valid documentations for reimbursing the supplier who has paid the freight to the transporter.
For your information, service tax applicability of GTA services is in developing stage and various issues/opinions are being given. If possible, kindly take consultancy of your range service tax officer, since they will only be handling your assessment.
Manoj Agarwal
(Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com)
(3456 Points)
Replied 03 December 2013
Well explained... still to know more about service tax on GTA, kindly follow the below link where I have covered most of the aspects with illustrations. A pdf file is also attached :-)
/articles/service-tax-on-gta-a-guide-19063.asp
Regards,
Manoj Agarwal
ServiceTaxExpert @ yahoo.com
VIKASH KUMAR JAIN
(Audit Executive)
(711 Points)
Replied 07 December 2013
NOUFAL
(ACCOUNTANT)
(762 Points)
Replied 08 December 2013
The transportation consignment note is prepared on the basis of reverse charge mechanism. the service receiver need to pay 100% tax on transportation charge
Tej Prakash Devpura
(DM)
(21 Points)
Replied 18 November 2014
is GTA is applicable on trsnportation of Furance oil.
Manoj Agarwal
(Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com)
(3456 Points)
Replied 18 November 2014
Yes, if transportation is done by road in a goods carriage
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