service tax on GTA service

[Guest]

Dear Sir,

I have already  paid service tax on gross receipt of work contract including  freight & cartage  (telecom division of tower vision)but service tax officers are saying that you have to also pay service tax on input service freight & cartage receipt by me to other transporter for work contract. I think it would be double taxation.

kindly give me your best suggestion.

with regards 

dilip kumr agrawal (advocate) 

[Dilip Darji]

Dear Sir.

Under the works Contract Service you are required to pay Service Tax on Gross Value Charged by you. Accordingly you have correctly paid Service Tax on Gross value including freight and cartage.

Regarding payment Service Tax on Input Service Freight and Cratge paid to Transporter, you have a libility to pay Service Tax on 75 % of the Freight Charges. You shall this amount by way of a seterate GAR-7 and can avail CENVAT credit of Service Tax paid on Freight Charges.

There is no such exemption from payment of Service Tax on Freight and cartage, if the same is included in gross value of works contract, on which Service Tax is being paid.

Regards.

AI Summary

Clarification on Service Tax: Pay 75% on Freight Charges Under Work Contract; CENVAT Credit Available, No Exemption. A user inquired about service tax obligations related to freight and cartage under a work contract, expressing concern over potential double taxation. They had already paid service tax on the gross receipt, including freight and cartage. A respondent clarified that while the service tax on the gross value was correctly paid, there is also a requirement to pay service tax on 75% of the freight charges paid to transporters. This amount should be paid separately, and CENVAT credit can be availed for the service tax paid on these freight charges, as there is no exemption for such payments.