GTA cenvat credit

[venkat eswaran]

Dear all

WE are mfg unit, for freight outwards & inwards we hired / contract with various transporters. Some transporters chrgd ser tax in their invoice and some transporters giving bills without ser tax. We are paying ser tax[GTA} those who not chrgd in the bill and taking cenvat credit.

Some Excise authorities saying we have to pay all ser tax on behalf of transporters. Transporters no need to pay. Is it ok? Ser tax part on service receiver is optional or compulsory?

Pl share ur views

Thanks in advance

Venkat

[Suryanarayana Sathineni]

Dear Friend,

As a matter of fact, the ST on GTA is to be paid by the service receiver under reverse charge on the abated value ( 25% of the freight charged if my remembarence goes correct).

In certain cases, like the providers of door to door cargo handlers like GATI, XPS cargo etc. the liability of paying service tax is on such transporters and hence some of your transporters are paying ST accordingly.

Hope your query is answered.

Best Regards

Suryanarayana

[Ganeshan Kalyani]

Sir, service tax on GTA is payable by either the consignor or consignee whoever is paying the freight. If both consignor and consignee ar not liable to pay on any exceptional cases then transporter himself is liable to pay service tax on freight amount. Considering this provision please out your transaction for service tax liability.

Further, as you have mentioned in your query that some transporter does charge service tax and some does not. I infer that those who charge service tax will be paying it under their registration number on such scenario as mentioned in above para. Otherwise why they should charge service tax on invoice. Secondly those who do not charge service tax on invoice and also the order party either supplier or purchaser have not paid service tax, and you have paid the same. This is correctly complied and out of three party to the transaction one has to pay the applicable service tax.

And the liability of service tax on freight is on 30% of freight amount. The abatement of 75% has been rationalised to 70%.

Thanks.

[KASTURI SETHI]

I fully concur with the views of Sh.Ganeshan Kalyani,Sir. Explained beautifully leaving no aspect untouched.

[Ganeshan Kalyani]

Thank you for your compliment Sir. It encourage me to a lot. Thanks.

AI Summary

Reverse charge on GTA services: freight payer must discharge service tax unless transporter is separately liable. Service tax on Goods Transport Agency services is generally payable by the service receiver under the reverse charge mechanism on an abated taxable value of freight (described variously as 25% or 30% of freight reflecting different abatements). Transporters providing door to door cargo handling may instead be liable and charge tax under their registration. Liability follows the party that pays freight-consignor or consignee-or, where neither is liable, the transporter. Payment by the receiver with cenvat credit is described as a permissible compliance route.