Service tax on GTA

[Mridul Sethi]

Pls clear me,

1. About the limits of Rs.750/- & Rs.1500/- in case of GTA.

2. Also, is every assessee liable to GTA service tax is eligible for exemtion of 75%

[YAGAY andSUN]

The first covers an "individual cosignment' trasported by a GTA for a particular consignee.  In such a situation if the gross amount charged for tranport of thses goods in Rs. 750/- or less there will be no levy of service tax.  The limit of Rs. 750/-  is with reference to each truck load carried for a particular consignee.

The second situation is where consignments are transported in a goods carriage for different consignees and the total freight does not exceed Rs. 1500/- in all.  In such case also there is exemption from service tax, even if the goods are carried by a motor vehicle against different consignment notes.

W.e.f. 01-03-2008, exemption from service tax which is in excess of 25% of the value has been granted unconditionally vide Nofn.13/2008-ST dated 01-03-2008.

[Mridul Sethi]

But pls let me clear, from a company point of view how can I decide that the Goods Transport Agency has booked only one cosingment or more than one in a particular vehicle.

[YAGAY andSUN]

You have raised a logical and a very good question that who will find out and decide whether the freight on single consigment is Rs. 750/- or 1500/- so as to be eligible for exemption.

The answer clearly is the Goods Transport Agency.  Only the GTA will know whether the goods  being carried in a goods carriage qualify for exemption under Rs. 750/- or Rs. 1500/- limit respectively.  Accordingly a goods transport operator eligible for either exemption under Rs. 750/- or Rs. 1500/- limit should preferable declare that the goods are eligible for service tax exemption under notification no. 34/2004 dt. 3-12-2004 in the consignment note or bill raised by him.

The user of the service has to educate the transporter on this matter.

[Mridul Sethi]

Sir,

-->It is okey to educate the transport to give such type of declartion,

-->but in practical we purchase maximum material on to-pay basic &

-->there are too much unknown transporters who bring the material in company. 

 -->So, pls suggest what to do in such a situation, whether I have to make standard of Rs. 750/- regardless of any type of consignment, but in such a case I have to problem in reporting to management that why Rs.1,500/- limit not taken.

[YAGAY andSUN]

Simply, you need not to pay the tax on such amount.

[Vijay kumar]

In the first case i.e. where the gross amount charged for a consignee is less than Rs.750/-, there is no problem since the goods transporter will raise the bill to you accordingly and you will know that there is no need to pay the tax. The problem arises only when the gross amount charged on the consignments in a goods carriage is less than Rs.1500/-, particularly when your charges are more than Rs.750/-. Hence in a specific case where your charges are more than Rs.750/- and the gross charges are less than Rs.1500/- , ask your transporter to indicate the same in the bill. That should solve your problem.

[NK SHETE]

Dear Sir,

 

Please inform what remark the transporeter should write on the bill when the charges are more than Rs. 750 but less than Rs. 1500 

[ASITAVA CHACKERBUTTY]

first you have to determine whether local truck owner was used or GTA service was used. If local truck owner then no service tax payable for any amount paid. If GTA SEVICE USED THEN DECLARATION FROM gta WOULD BE NECESSARY FOR 1500 LIMIT.

[Sumit Sharma]

please see Nofn.13/2008-ST

yes every assessee is eligible for exemption of 75%

[Vijay kumar]

The GTA operator should certify that the gross amount charged on all the consignments in a goods carriage is less than Rs. 1500/-. In such a case, u will have proof for claiming exemption under the second category. Regarding abatement of 75%, every assessee liable to pay the service tax on GTA is eligible for the same w.e.f. 1.3.2008 in terms of Nofn.13/2008-ST dt.1.3.2008.

[Guest]

Is TDS liable to be deducted on payments made to GTA u/s 194C ???

CA. Vaibhav Sachdeva

AI Summary

GTA service tax exemption thresholds clarified; transporter declaration required and substantial abatement available to eligible assessees. Service tax on GTA operations is governed by two exemption thresholds: a per-consignee threshold and a per-vehicle aggregate threshold. The GTA is responsible for determining and certifying whether consignments fall within these thresholds, and should note the applicable exemption on consignment notes or bills. A standardized abatement for GTA services is available to eligible assessees. Payments to local truck owners are outside GTA service tax, whereas services by a GTA require transporter certification to support exemption claims.