Service Tax payment on GTA Service

[Arti Gupta]

Before 01.04.2011, when Service tax is to be paid for GTA service under reverse charge. Whether on payment or service provided by GTA?

[SHIVKUMAR SHARMA]

Dear Deepak

 

Service tax is to be paid only on the 25% of amount paid to GTA under reverse charge .

 

Shivkumar Sharma

[Shyam Naik]

Dear Deepak,

In case of service tax payable by the service receiver under reverse charge, the tax shall be paid on payment basis.

However, if payment is not made to the service provider(GTA, in this case) within 6 months from the date of the invoice, the point of taxation shall be the date of the invoice.

Please refer rule 7 of Point of taxation rules.

 

Shyam

[Arti Gupta]

Please explain the position before 01.04.2011 when point of taxation rules was not applicable.

AI Summary

Service tax on GTA reverse charge: receiver liable on payment basis; if payment delayed, invoice date may determine tax point.
For GTA services under reverse charge the service recipient is liable for tax computed on the prescribed portion of the GTA charge. Tax under reverse charge is generally payable on a payment basis; if payment is not made to the provider within the delay specified in the Point of Taxation rules, the point of taxation becomes the invoice date under Rule 7.