Service tax liability of GTA & RCM when exempted service provided

[Guest]

Dear Sir,

We are the Govt. Road Contractor. This work contract is exempted from service tax. Please confirm whether we are liable to pay service tax under GTA and Reverse charge mechanism. we have received and paid following services are under ,

A) Transportation for materials purchased

B) Rent of cab for staff

c) Taken consultancy from Individual.

Kindly let me know the proper taxation under service tax

Regards

Sanjoy Das

[Rajagopalan Ranganathan]

Sir,

A) As per rule 2 of Service Tax Rules, 1994 "person liable to pay service tax in relation to service provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road, is, -

(I) any factory registered under or governed by the Factories Act, 1948 (63 of 1948);

(II) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India;

(III) any co-operative society established by or under any law;

(IV) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder;

(V) any body corporate established, by or under any law; or

(VI) any partnership firm whether registered or not under any law including association of persons;

any person who pays or is liable to pay freight either himself or through his agent for the transportation of such goods by road in a goods carriage:

I hope you are an individual who undertake the job of Road Contractor on behalf the Government. Therefore you are not liable to pay service tax on goods transport agency service under RCM. The service tax is to be paid by the Goods Transport Agency.

B) As per Notification No. 30/2012-ST dated 30.06.2012 as amended (vide Sl. No. 7 of the Notification) in respect of rent a cab service, if service provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on abated value (40% of the gross amount charged by the service provider) to any person who is not engaged in the similar line of business you have to pay 100% tax under RCM. If services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on non abated value (gross amount charged by the service provider) to any person who is not engaged in the similar line of business you have to pay 50% of the tax payable and the remaining 50% is to be paid by the provider of the service.

C) In respect of consultancy service provided by individual you need not pay the service tax under RCM. Full tax is to be provided by the service provider.

AI Summary

Reverse charge on rent-a-cab and GTA: recipient liability varies; rent-a-cab RCM applies, consultant pays tax. GTA road-transport services are taxable with the GTA liable to pay service tax unless the recipient falls within specified classes liable under reverse charge; an individual government road contractor is not liable under RCM. Rent-a-cab services follow Notification No. 30/2012 ST: abated-value supplies to non similar-business recipients trigger full reverse charge on the recipient, while non abated-value supplies to such recipients split tax liability 50/50 between recipient and provider. Consultancy by an individual is taxable and payable by the provider, not the recipient.