GTA on service tax

[Asked by Guest]

When a Goods Transport Agency (GTA) is hired by you for transporting raw material or finished goods or any other purpose relevant to business, liability to pay the service tax on the transport service received will be on the service receiver.

As per Service tax Rules, Services provided by a GTA in relation to transportation of goods is leviable to service tax under GTA service [section 65(105)(zzp)]. Service tax for the GTA service provided is payable only on 25% of the amount charged for providing the GTA service and the balance amount is exempt from levy of service tax.

Service Input Credit on Services Purchased

• If the Service Receiver pays the Service tax on the gross amount of GTA services received. He will be eligible to avail the input credit of the tax paid on the services purchased.
• If the Service provider opts for 75% abatement and pays the service tax on 25% of the Gross Amount GTA services received, then No Credit will be available

 Please quide,

presently it is any changes or stil continue.

AI Summary

Reverse charge on GTA services places liability on the service receiver in specified categories and limits credit eligibility.
GTA services for carriage of goods are taxable with the recipient liable where hired for business; an abatement reduces the taxable portion but, if availed, precludes CENVAT credit on inputs, input services and capital goods and requires a declaration from the GTA confirming no credit availed. A notification applies a reverse charge mechanism making the person liable to pay freight (when falling in specified recipient categories) responsible for discharging the service tax, affecting payment responsibility and credit interactions.