Transportation charges under reverse management

[Anil Kumar]

Dear Sir,

I would like to know the calculation for paying the S. tAX on Transportation charges as per Reverse charge Mechanism and I have paid in previous FY 14-15, 15-16 can I avail the paid part as cenvat credit.

Thanks

Aneel

[Ganeshan Kalyani]

Sir, service tax on GTA is payable on 30% of freight amount. Further Cenvat credit is allowed to be taken only within one year. Thanks.

[AJAY KUMAR]

Sir,

Further to Ganeshan Kalyani's opinion, CENVAT credit should not have been taken by service provider for availing the abatement of 70%.

AI Summary

Reverse charge on transportation services requires specific freight valuation and limits Cenvat credit claims to a short statutory period. For goods transport agency services under the reverse charge mechanism, tax is applied to a portion of the freight value and the recipient bears the liability. Cenvat credit is available only subject to a prescribed limited temporal limitation and procedural conditions, and service providers should not claim input credit while simultaneously claiming the statutory abatement on freight.