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Service tax rate on gta including swachh bharat cess

Karunakar (ACCOUNTS OFFICER IN TATA PROJECTS LTD.) (73 Points)

28 March 2016

PLEASE LET ME KNOW THE RATE OF SERVICE TAX ON GTA IS 4.35% OR RATE IS 4.2% & 0.5% SWACHH BHARAT CESS

I.E. IF GTA GROSS VALUE IS RS.50,000/-,

1. ST RATE IS 50,000*4.35% = 2,175/-

2. ST RATE 50,000*4.2% = 2100 & SWACHH BHARAT CESS 0.5% ON 50,000 = 250

TOTAL RATE OF GTA = 2.350/-

PLEASE CLARIFY WHICH IS CORRECT RATE OF SR. NO.1 OR RATE OF SR. NO. 2

THANKS

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3 Replies

Jagdish (CA CS activities) (215 Points)
Replied 28 March 2016

2. ST on 50000 * 4.2% = 2100 (14 * 30% = 4.2%)

Swachh Bharat Cess on 50000 * 0.15% = 75 (0.5 * 30% = 0.15%)

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Jagdish (CA CS activities) (215 Points)
Replied 28 March 2016

2100 + 75 = 2175

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Vishal Goel (Chartered Accountant) (1688 Points)
Replied 28 March 2016

Agree with jaddish

Section 119 provides that SBC would be levied and collected as service tax. Further, sub section 5 provides that provision of chapter V of the Finance Act would apply to SBC as they apply to service tax. The abatement notification is issued under section 93 (chapter V) of the Act. So, this notification would apply for SBC also in the same manner as apply for service tax. Hence, the effective rate of tax on all abatement services would be 14.5% * effective rate under Notification 26/2012-ST. For GTA, it would be 14.5%*30%= 4.35% (not 4.70%).

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