GTA SERVICES

[Asked by Guest]

SIR

WE ARE A MANUFACTURING UNIT UNDER WHICH ACTUAL SALES &  PURCHASE ARE IN OUR NAME BUT ALL PAYMNT TO SUUPLIERS & COLLECTION OF DEBTORS IS DONE BY BRAND OWNER.WE ONLY GET OUR MANUFACTURING CHARGES.

SIR NOW IN CASE OF GTA SERVICES ALL BILLS/GR COME IN OUR NAME ALONGWITH ALIAS  BRAND OWNER'S NAME. IN CASE WHERE WE ARE LIABLE TO PAY FREIGHT WE PAY SERVICE TAX & GET IT REIMBURSED FROM BRAND OWNER. BUT THERE ARE TIMES WHEN BRAND OWNER HIMSELF PAYS TO GTA DIRECTLY.SIR PLZ GUIDE US WHETHER WE ARE LIABLE TO PAY SERVICE TAX ON SUCH PYMTBY BRAND OWNER DIRECTLY TO GTA THOUGH GR IS IN OUR NAME BUT PYMT MADE BY BRAND OWNER.

PLZ GUIDE

[YAGAY and SUN]

In this taxable services, there are seven categories who are liable to pay the tax.  Generally, in GTA Sevices, whoever, pays the freight is actually liable to pay the service tax under Reverse Charge Mechanism.  In your case, the GR issued by the Transporter is in your name as well as well the owner of the Brand Name, therefore, in this scenario, in the event of payment made by you pertaining to freight, you are liable to pay the Service Tax on GTA, otherwise, by the brand owner, if he directly pays the freight.

But for audit purpose, copies of the challan regarding payment of Service Tax should be kept by both of you.

sir

is there any notification or clarification as such so that it can be conveyed to brand owner also.

plz guide

AI Summary

Reverse charge liability: payer of freight is liable for service tax on GTA; retain payment challans for audit.
Under GTA services the person who actually pays the freight is liable to discharge service tax under the reverse charge. If the manufacturer pays freight (even if reimbursed by the brand owner) the manufacturer is liable; if the brand owner pays the transporter directly the brand owner is liable despite the goods receipt naming the manufacturer. Both parties should retain copies of challans evidencing payment for audit purposes.