Benefit of exemption limit - GTA

[Asked by Guest]

M/S ABC IS A COMPANY RECEIVING GOODS TRANSPORT SERVICES FROM GTA AND PAYING SERVICE TAX AS SERVICE RECIEVER. TOTAL AMOUNT PAID TO GTA DURING FINANCIAL YEAR 06-07 WAS ONE LAC ONLY. M/S ABC IS ALSO PROVIDING CONSULTANCY SERVICES,BUT THE TOTAL RECIEPT FROM CONSULTANCY DURING 06-07 WAS TWO LACS. MY QUESTION IS CAN M/S ABC CLAIM THE BENEFIT OF 4 LACS EXEMPTION,INSPITE OF BEING REGISTERED WITH SERVICE TAX AS SERVICE RECIEVER OR LIABLE TO PAY SERVICE TAX ON CONSULTACY FEES. IN OTHER WORDS WHETHER WE CAN CLAIM EXEMPYION BENEFIT OF 4 LACS OR 8 LACS, EVEN IN A CASE WHEN WE ARE PAYING SERVICE TAX AS SERVICE RECIEVER FROM GTA, AS 8 LACS EXEMPTION IS FOR SERVICES PROVIDED. THANKS CA POONAM JAIN VIVEK VIHAR, DELHI E MAIL: [email protected]

[Vijay Chitte]

A service provider is eligible to avail exemption from service tax on aggregate value of taxable service not exceed Rs.4 lakh in any financial year, if during the preceeding financial, the aggregate value of all taxable service provided by him from one or more premises, excluding exempted service, did not exceed Rs.4 lakh. WHILE COMPUTING AGGREGATE VALUE OF TAXABLE SEVICES, THE PAYMENT RECEIVED TOWARDS THE GROSS AMOUNT CHARGED FROM SUCH SERVICE RECIVERS WHO ARE LIABLE TO PAY SERVICE TAX ON "GTA" SERVICES (being from specified category), IS NOT TO BE INCLUDED. THIS EXEMPTION IS SUBJECT TO CERTAIN CONDITIONS. (refer notification 06/2005-ST), FURTHER THIS EXEMPTION IS NOT AVAILABLE TO THE PERSONS WHO ARE LIABLE TO PAY SERVICE TAX ON GTA SERVICES AS RECEIVER OF THESE SERVICES AS PER RULE 2(1)(d)(v)OF THE SERVICE TAX RULES. Vijay Chitte - Claris Lifesciences Ltd.

AI Summary

Small service provider exemption may be unavailable where the provider is liable to pay service tax as GTA receiver.
Eligibility for the small service provider exemption is determined by the aggregate value of taxable services provided in the preceding financial year not exceeding Rs.4 lakh; in computing that aggregate, receipts from service receivers liable to pay service tax on GTA services are excluded. The exemption is subject to notification conditions and is not available to persons liable to pay service tax as receivers of GTA services under the service tax rules.