Goods Transport operator(GTO)

[Rajiv Sinha]

Pls explain me some doubt regarding service tax.

Our company is a manufacturing company.and registered as a GTO(Goods Transport operator)in service tax department.sir my question is as follows.weather we are correct or not.

1) i deposit service tax on those transporter,who already registered in service tax department and charging service tax in his bill.(We are debting service tax amount to him and deposit service tax by our account).am i correct.

2)We are depositing service tax on those transporter,who are registered or not registered in service tax department and not charging service tax in his bill.

3)if we are not depositing service tax because transporter is registered in service tax and charging service tax in his bill and deposit to the department.

4)If we are taking abatement on bill,should we take confirmation letter from transporter for he is not taking cenvat credit.

Thanks,

Rajiv Sinha

[Alok Kumar]

Dear Mr. Rajiv Sinha,

1) from your query what i understand  is that yours is a unit i.e. basically a factory where manufacturing acitivities are carried out , hence it is your unit which is liable to pay the service tax and file the returns/ and do all other compliance as provided under the service tax rules/ act.(i also understand that you engaging the transporter and paying the freight to the transporter)

2) as you are recepient of the said service under the reverse charge mentod , you are no longer required to prove the non - availment of CENVAT credit by the GTA SERVICE Provider. This position has been also clarified by the CBEC after amending the Cenvat Credit Rules.

Alok Kumar

Advocate and Consultant

[Guest]

In point no. 1 I think no problem should be arise.

in point no. 2 correct.

in Point 3. a proof of payment should be kept with you which may be produce as an evidence of deposit.

3.  On each and every  G R it should be mentioned that  cenvat credit not claim by transporter instead of collection certificate will be  better

AI Summary

Reverse charge liability requires the recipient to pay service tax on GTO services and retain evidence of deposit. Recipient liability under reverse charge requires the manufacturing unit engaging a Goods Transport Operator to discharge service tax and file returns; retain proof of tax deposit when tax is paid under reverse charge. Post amendment to the Cenvat Credit Rules, the recipient need not prove non availment of CENVAT credit by the transporter. If taking abatement, obtain written confirmation from the transporter that it is not claiming CENVAT credit, or endorsement on transport documents, to support recordkeeping.