Taxable turnover of GTA

[Asked by Guest]

While calculating the Taxable turnover/ taxable value of services (Service tax) of GTA , Can I deduct the abatement(70%) from the total turnover first and then deduct the fully exempted items ie around 30% - 40 %.Is this calculation is correct ? If it is wrong please suggest the correct method of calculation

[Ganeshan Kalyani]

Sir you can very well take the benefit of abatement. However you should not deduct the value of exempted goods from gross amount of freight. The service on GTA is a tax on GTA. Thanks.

[KASTURI SETHI]

Sh.Frankling G,

In terms of Notification No.33/12-ST, turnover of GTA is not to be included for arriving at Rs.Ten Lakhs, threshold exemption limt.

3. For the purposes of determining aggregate value not exceeding ten lakh rupees, to avail exemption under this notification, in relation to taxable service provided by a goods transport agency, the payment received towards the gross amount charged by such goods transport agency under section 67 of the said Finance Act for which the person liable for paying service tax is as specified under sub-section (2) of section 68 of the said Finance Act read with Service Tax Rules, 1994, shall not be taken into account.

[Ganeshan Kalyani]

Sir actually I assumed that you are receiver of GTA service hence I advised accordingly. Please refer Sri Kasturi Sir's reply in this regard. Thanks.

AI Summary

GTA service abatement may reduce taxable value, but GTA turnover is excluded from threshold aggregation calculations.
Abatement for GTA receipts may be applied to compute taxable value, but exempted goods' values must not be deducted from gross freight; separately, GTA turnover is excluded when determining aggregate value for threshold exemption and payments constituting the gross amount charged by a Goods Transport Agency are not taken into account for that purpose.