GTA PAYMENT ON TRADING ACTIVITY

[SNEHAL SHAH]

Sir,

our one unit is trading unit , only material purchase & sale , that means trading activity . NOw some confusion is that we are pay transprot expense above 1500/- & some bill is above 5000/- . so is that any GTA Related liability in this case .

 Pl. suggest .

 SACHIN

[Vijay Chitte]

if the consignor or the consignee falls under one of the following seven categories, namely,

i. factory registered under or governed by the Factories Act; or

ii. company established by or unçler the Companies Act; or

iii. corporation established by or under any law; or

iv. society registered under Societies Registration Act or similar law; or v, co-operative society established by or under any law; or v. dealer of excisable goods, registered under the Central Excise Law; or

vi. any body corporate established or a partnership firm registered by or under any law,

the person making payment towards freight would be liable to pay the service tax!! Therefore, unless a trader falls under one of the above categories or makes payment of freight when transacting with any one of the seven categories, the trader would not be, liable to pay the service tax. Thus, a trader sending goods to another trader or any entity outside the above seven categories would not be liable to pay service tax, even if the freight is paid by him.

Also refer CBEC circular F.No. 341/18/2004-TRU(Pt.)  dated 17th December, 2004.

 

[rajkumar shukla]

 EVEN IF CONSIGNOR / CONSIGNEE IS ONE OF SEVEN CATEGORIES LISTED ABOVE , THE TRADER WOULD BE LIABLE FOR PAYMENT OF SERVICE TAX IF FREIGHT EXPENSES ARE BORNE BY THE TRADER. IT IS NOT NECESSORY THAT ONLY TRADER SHOULD FALL UNDER SEVEN CATEGORIES.

AI Summary

GTA service tax liability arises when freight is paid for goods involving prescribed recipient categories or when payer bears freight. GTA service tax liability arises where freight is paid for goods whose consignor or consignee falls within seven prescribed categories (factories, companies, statutory corporations, registered societies, cooperative societies, dealers of excisable goods registered under central excise law, and registered bodies corporate or partnership firms); the payer of freight is liable for service tax. A divergent practical interpretation notes that a trader who bears freight expense will be liable upon payment irrespective of the trader's own category status.