Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

Service tax on GTA in Non-taxable territory

Service Tax - Started By: - Ganeshan Kalyani - Dated:- 19-5-2016 Last Replied Date:- 31-5-2016 - Sir, I would like to discuss on applicability of service tax on GTA availed in non-taxable territory.A manufacturing unit is located in J&K (non-taxable territory). It has branches in across states (taxable territory). Manufacturing unit manufactures goods and for sale it has to be carried to states where it has depots. For this purpose, manufacturing unit arranges for freight and also pays the f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by the person paying freight. Here the unit in non-taxable territory has paid, hence no service tax. Request to discuss on the issue. Thanks. - Reply By KASTURI SETHI - The Reply = Sh.Ganeshan Kalyani Ji, Service tax is consumption based tax. GTA is under RCM. As per Rule 10 of Places of Provision Services Rules, 2012, the place of provision is place of destination of the goods which is taxable territory (in different cities other than J & K . Hence Service Tax is payable. I also solicit the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ease clear consignment note / LR mark TOPAY basis in such condition, depot has pay the service tax as explain shree kasturi sethi sir, if freight is paid basis need not pay service tax in such situation. This is my view. - Reply By Ganeshan Kalyani - The Reply = Sri Mukund ji , do you mean to say that if 'freight Paid basis' is mentioned on invoice then this would be strong proof to justify that liability of service tax arises on unit located in unon-taxable territory. Am I right. - Repl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

9;' If SP and SR executes a contract to the effect that SP would pay ST whereas statutory liability is of SR, that agreement would be in violation of Service Tax law. (Though that agreement may be legal as per Evidence Act.) But here ST rules and regulations will prevail. In respect of 'Manpower Supply', entire liability is cast upon SR and in case SP says he would pay ST on behalf of SR, he cannot do so as per ST law. Now the department is issuing SCNs to those Assessees who are lia .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eceiver/business entity. It is worthwhile to mention that most evasion-prone services have been brought under RCM. This is strategy of Govt. to involve two persons and one of them should be business entity. GTA was brought under RCM after a great uproar created by the transporters during the years 1998 and 2004. - Reply By CS SANJAY MALHOTRA - The Reply = Dear Friends, Endorse the views of Sh. Kasturi ji as he has in right spirit sticked to First Part only of Rule 10 of POPS. Second part of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r, what would prevail in law if i compare Service tax rules, 1994 and Place of provision of service rules, 2012. Thanks - Reply By Ganeshan Kalyani - The Reply = Sri Kasturi Sir, both the rules have different view and therefore the query is here. Thanks - Reply By CS SANJAY MALHOTRA - The Reply = Service Tax Rules 1994 Rule 2(1)(d) : if the person liable to pay freight is located in Jammu (Non-Taxable territory), then the liability is on the service provider (who is located in taxable territory) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ON I.E. TAXABLE TERRITORY OR NON-TAXABLE TERRITORY and then comes other provision of Rules. If the service is provided from taxable to non-taxable territory, then Service provider (Taxable territory) has to pay tax, irrespective of who makes freight payment. If the service is provided from non-taxable territory to Taxable territory, then the service receiver (taxable territory) has to pay service tax irrespective of person making the freight payment. Reference can be made to Sec 66B & 66C of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to pay freight is liable to pay service tax. Since both the party are in non-taxable territory service tax is not applicable. Further the material reached the depots at various location (taxable territory) from Jammu (non-taxable territory). As per Place of provision of service rules the place of provision of service of goods transport agency shall he the location of the person paying freight. Thus as per both the provision in my case service tax is not liable. Thanks. - Reply By KASTURI SETHI - .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

utsider would get benefit which is not permissible in ST Rules and POPS Rules,2012. For example; in Himachal Pradesh under area based exemption scheme, people misused the facility of job-work and Govt. amended the rules to plug the leakage of revenue. Assessee located outside HP started misusing the job-work facility. Similarly, non-payment ST would be treated as misuse of ST law by the Service Receiver with the connivance of Service Provider/Consignor. Sir, this is my view. - Reply By CS SANJAY .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ver) based in taxable territory has to pay service tax.Transporter is not relevant person in the present issue as the goods are transported by him, but the person liable to pay freight is to be considered as either consignor or consignee.Location of Person liable to pay service tax If the consginor and consignee are based in taxable and non-taxable territory then the Person liable to pay service tax shall be considered as person location in taxable territory.Sir, request once gain Please refer S .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion of law. - Reply By Ganeshan Kalyani - The Reply = Yes sir. Sir for me both of you are super star. Thanks. - Reply By KASTURI SETHI - The Reply = Sh.Ganeshan Kalyani Ji, But I consider Sh.CS Sanjay Malhotra, Sir not only above me but also at the zenith in the taxation sky, especially, in view of the fact that during my 33 years' service I have seen so many advocates and higher officers in the department. Whenever I express my views on any disputed issue, I cannot sit still until or unles .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version