Service Tax on GTA on RCM

[TEJASWINI BELOSE]

My client(A) is hiring GTA (B) and providing services to its customers(C). But they(A) are claiming it as transport charges say ₹ 10,000 paid in profit and loss A/c. Also they are recovering the same including their commission of ₹ 15000 from its customers(C) and showing it under Sales in profit and Loss A/c and earning commission of ₹ 5000/- in the transaction. C is paying Service tax under RCM on ₹ 15000/-.Whether in this case B is also liable to pay service tax on RCM basis on ₹ 10,000/-??? Will this not lead to double taxation on part of B if C is paying service tax on entire ₹ 15000/-????

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AI Summary

Clarification Sought on Service Tax Obligations for Goods Transport Agency to Avoid Double Taxation Under RCM A client (A) hires a Goods Transport Agency (GTA) (B) and provides services to customers (C). They record transportation charges of 10,000 in their profit and loss account and recover 15,000, including a 5,000 commission, from customers. Customer C pays service tax on 15,000 under the reverse charge mechanism (RCM). The query concerns whether GTA B must also pay service tax on the 10,000, potentially causing double taxation since C already pays tax on the full amount. Responses suggest checking relevant notifications and clarifying tax obligations under the RCM to avoid double taxation.