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Service Tax on GTA

sagar (CA Final) (379 Points)

23 August 2009

There is a provision that the consignee is liable to pay service tax on consignment of goods rceived by it through goods transport agencies.

The service tax so payable is on 25% on freight amount.

Now my question is:-

1. Is it mandatory that all consignees ( Firm, Companies, Individuals) mandatorily have to pay service tax on GTA?

2. If an assess is not registered under service tax, still he has to pay service tax? if yes how?

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Satish (CA Final Student) (479 Points)
Replied 23 August 2009

There are following possibilities -

1. If transporter has charged service tax in his bill, Consigner or consignee need not pay separately again. The liability will be discharged by transporter in this case by collecting the service tax from consignor or consignee to whom he has billed.

2. If the transporter has marked on the consignment, the person responsible to pay service tax, either consigner or consignee whosoever is paying freight, all the specified persons (Individual or proprietory firm is not specified for this purpose) who are consigner or consignee to pay the freight are liable to pay service tax.

3. Where the consignor or consigner are sole proprietor or Individuals, Service tax is payable by Transporter

For paying service tax, it is mandatory to get registered by every person who is liable to pay service tax.