Reverse Charge on GTA

[Varun Arora]

Dear Experts,

please resolve my query

A proprietorship firm is operating in haryana and another unit(in proprietorship) in karnataka

in this case haryana unit is registered under central excise but karnataka unit is not registered under central excise.

in this case i want to know whether unit is liable to pay service tax under revese charge mechanism for haryana unit or for karnataka unit as well??

because language is 'person registered under excise act' in this case person shall be considered for karnataka unit collectively and liable to pay service tax ?

In this case haryana unit is also transferring goods to karnataka unit in this case service tax paid on this transfer whether eligible for taking cenvat credit.

Thanks in advance.

[Ganeshan Kalyani]

The relevant extract of reverse charge notification is given below

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

Service need to be paid by both haryana unit and karnataka unit.

[Varun Arora]

Dear Sir

As mentioned in the query It is proprietorship firm not partnership firm

Please consider.

Thank you.

[Ganeshan Kalyani]

Haryana unit is registered under excise , so it is liable to pay service tax on Frieght. And also credit is eligible.

Service tax is liable to be paid by transporter in case Karnataka unit pays freight.

Either consignor or consignee or the transporter is liable to pay service tax.

AI Summary

Reverse charge on goods transport services: registered unit may bear tax liability and claim credit; transporter alternatively liable. Where a proprietorship has one unit registered under central excise and another unregistered, the registered unit may be treated as liable to discharge service tax under the reverse charge mechanism for GTA freight and may claim cenvat credit; alternatively, if the unregistered unit pays freight, the transporter or the consignor/consignee may be liable under the reverse charge rules.