Adjustment of Service Tax on Goods Transport Serives

[Pradeep Kaushik]

Dear all,

I make a provision for payment of Service Tax on payment to Goods Transport services. Can i adjust the service tax payable for Goods Transport service against my cenvat credit of Service Tax or I have to deposit the same.

[Brijesh Verma]

The tax has to be paid monetarily. However, recently certain judgments have been seen which state that the same can be paid through Cenvat Credit also. 

GTA has been removed from the definition of 'Output Service' and consequently the tax cannot be adjusted out of Cenvat Credit.

[NANDKUMAR SAGWEKAR]

Dear Mr. Pradeep

You have to pay the service tax on GTA services availed on reverse charge method .You can avai the abatement of 75% of taxable value of GTA bills paid subject to completion of some procedures . You have to pay the GTA by deposit of GAR - 7 Challans. However for inward transportation of goods and outward transportation upto the place of removal ( depots ) you can take cenvat credit also. Please follow this

1.On LR copy and Bill should mentioned that ' NO Cenvat credit is taken for providing GTA

   Service'

2. see other exemption notifications relating to small freight amount upto Rs 750 or Rs. 1500

Thanks

 

ANAND SHEMBEKAR

CELL 9421187122

 

AI Summary

Reverse charge on goods transport service requires monetary payment; cenvat credit largely disallowed, limited credit permitted for specific transport.
Liability to pay service tax on GTA services under reverse charge must be discharged by monetary deposit through GAR 7 challans, as GTA is not an output service and cenvat credit is generally not available. An abatement is available subject to procedures; limited cenvat credit may be taken for inward transportation and outward transportation up to the place of removal. Bills and LR copies should record that no cenvat credit is taken where applicable, and small freight exemptions may apply.