GTA services

[Asked by Guest]

hello,

I have a pvt ltd co. in chandigarh. We purchase goods from delhi and bill include freight,

let, goods cost = 100

cst = 2

total = 102

freight = 15

total = 117

so i pay rs 117 to the dealer of Delhi .

Am i liable to pay service tax under reverse charge?

[YAGAY and SUN]

No, since on freight amount Excise duty is being paid.

[Ganeshan Kalyani]

Either consignee or consignor or if both are not liable to pay tax then transporter himself have to pay service tax under gta.

[Rajagopalan Ranganathan]

Sir,

Rule 2 (d) (B) of Service tax Rules, 1994 stipulates that 'taxable person' in respect of goods transport agency service (GTA for short) where the person liable to pay freight is any factory registered under or governed by the Factories Act, 1948 (63 of 1948) or any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder. Therefore both you and the dealer supplying the excisable goods to you are liable to pay service tax. Normally dealers/manufacturers who supply the excisable goods will raise 'To pay' bills on their customer since the only the customer is eligible to take credit of service tax paid on GTA service. If the dealer has raised 'to pay' bill on you then you are liable to pay service tax under reverse charge mechanism.

[KASTURI SETHI]

I support the views of both experts, namely, Sh.Ganeshan Ksalyani, Sir and Sh.Rajagopalan Ranganathan, Sir.

AI Summary

Reverse charge liability on GTA services arises when a dealer of excisable goods issues a 'to pay' bill to the purchaser.
Rule 2(d)(B) identifies the taxable person for GTA services to include a consignee who is a factory or a dealer of excisable goods; where the dealer supplies excisable goods and raises a 'to pay' bill, the purchaser is liable to pay service tax under the reverse charge mechanism; if neither consignor nor consignee is liable, the transporter must pay the service tax.