SERVICE TAX -GTA

[HITENDRA DAVE]

We are manufacturing company, What will be rate of service tax on GTA for receipent as per new rule? Whether 75% abatment is applicable for receipent? after deposit 25% same we can take credit ?

[YAGAY and SUN]

Yes, it will be available provided you get a declaration from the Transporter that no CENVAT credit has been availed on Trucks (Capital Goods).

[Vijay kumar]

If you fall under the specified category in terms of Nofn.30/2012-ST, the liability to pay the tax under GTA is on you. The rate of tax is 12.36% on 25% of the freight incurred, in terms of Nofn.26/2012-ST. The condition involved is "CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.". If this condition is fulfilled, you can pay the tax on 25% and take credit of the same (inward) and if it is outward transportation, you can take the credit upto the place of removal in terms of Rule 2(l) of CCR, 2004

AI Summary

Service tax on goods transport agency: taxable portion of freight and recipient liability hinge on CENVAT credit conditions. Service tax on goods transport agency services is chargeable on the recipient when statutory provisions allocate recipient liability. Tax is computed on a taxable portion of freight where an abatement applies, contingent on the condition that no CENVAT credit has been availed on inputs, capital goods or input services used to provide the service. A transporter's declaration that no CENVAT credit was taken on capital goods supports the abatement. If the recipient pays tax under the recipient-liability provision and the credit condition is met, the recipient may claim input credit of the tax paid on inward transportation, and for outward transportation credit is available up to the place of removal under CENVAT rules.