Liability for service tax - GTA

[RadheyShyam Mangal]

A Company has purchased certain inputs. The Seller, being a no specified person, had paid the frieght to the Goods Trasport Agency and then claimed reimbursement from the said Buyer Comapany.Upto this stage service tax was neither paid by the seller consigner nor by the GTA . Now, whether such Buyer Company is liable to pay Service Tax for GTA Services as recepient of service when frieght payment was made by the seller Consigner to the GTA, then claimed as reimbursement from the buyer Company. If yes, is such Buyer Company eligible for Cenvat?

[Rama Krishana]

In this case, if you consider that buyer company has paid the amount to transporter through the seller (individual) and for this purpose, such seller has acted as his agent, the company can pay service tax on such GTA and claim the benefit of cenvat credit paid on such GTA as inward transportation.

AI Summary

Recipient liability for GTA services: buyer treated as recipient when seller pays transporter then recovers cost, enabling cenvat claim. When the seller pays the transporter and is reimbursed by the buyer, the buyer is the recipient of GTA services if the seller acted as the buyer's agent; the buyer can discharge service tax on the GTA service and, subject to applicable rules, claim cenvat credit for the service tax on inward transportation.