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Former Member

GTA Tax

Dear Friends,

Please tell me what is GTA tax and how is it calculate and its concept,there is some calculation like 25% will borne by Vendor and 75% will by Company.

I really dont understand,can you plaese explain me in details with example.

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    author's profile photo Former Member
    Former Member
    Posted on Jun 08, 2012 at 05:53 AM

    Hi Naveen Kumar

    Plz go through the below information it will helpful you.

    Central Government has issued notification No.29/2008-Service Tax, dated 26.06.2008 to exempt fully from levy of service tax on supply of transport vehicles (goods carriage) to a goods transport agency (GTA) to be used for transport of goods by road [section 65(105)(zzzzj) of the Finance Act, 1994].

    Representations have been received from the All India Confederation of Goods Vehicle Owners Associations and also from the All India Motor Transport Congress requesting to provide relief on account of levy of service tax on supply of goods carriage to GTA for use in transport of goods. It has been stated that GTAs often provide services in relation to transportation of goods by road using the goods carriage obtained on rent or hire basis. The relief has been sought on various grounds inter alia that the service tax paid on renting / hiring of goods carriage, without right of possession and effective control, could not be taken as input credit for payment of service tax towards GTA service.

    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. In view of this provision, GTAs are not entitled to take input credit under Cenvat Credit Scheme on goods and services used for GTA service. Moreover service tax for GTA services provided in seven specified cases is not required to be paid by the GTA service provider but by the person making payment towards the freight.

    In this years budget, services provided in relation to supply of tangible goods for use, without transfer of possession and effective control, has been made as separate taxable service and this service has come into force w.e.f. 16.05.2008. Consequently, supply of goods carriage to the GTA, without transfer of possession and effective control, for using the said goods carriage for transport of goods by road becomes leviable to service tax.

    Notification No.29/2008-Service Tax, dated 26.06.2008 exempts fully the levy of service tax on supply of goods carriage to GTA for use in transportation of goods by road.

    Source(s):

    service tax department

    Thanks with regards

    Madhu

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    • Former Member Former Member

      To give an example

      Invoice from a transporter is Rs 750/- then tax is not applicable.

      when transporters invoice value is Rs 1000 then tax is on full amount

      then 12% Service Tax 0.24% Education Cess & 0.12% Secondary Education Cess will be applicable on 25% of Rs 1000 i.e on Rs.250

      So

      The tax will be calculated 12.36% of 250 = 30.90

      Otherwise we can also calculate (12.36%*25%) i.e 3.09% of 1000 = 30.90

      After this we can not deduct the same from vendor but add Dr to our Expense/Receivable & credit to our payable.

      Pls recheck/confirm exempt amount & tax rates in your case. Note 1242881 talks about treatment of same in SAP.

  • author's profile photo Former Member
    Former Member
    Posted on Jun 08, 2012 at 05:54 AM

    Dear Navin

    GTA is a service tax , in relation to the transport services, the onus of collection and payment of service tax has come to the recipient of the services unlike the provider of the services in other cases. Hence organizations are required to collect and deposit the tax with the govt. authority on behalf of the transporters.

    Refer Sap Note for GTA & COnfiguration.1242881, which tells you to use Withholding tax for fulfilling the GTA requirement


    The below mentioned post will clarify everything to you.


    Also Refer post http://scn.sap.com/thread/3185928

    As per the note

    Consider a transport bill of INR 10,000 with service tax of 12%. The receiver of the services will pay the Service tax.

    During IV, the following entries should be created:

    Details

    Dr

    Cr

    GR/IR clearing Dr

    10,000

    Service tax receivable A/c Dr

    1,200

    Vendor Cr

    10,000

    Service tax payable A/c Cr

    1,200


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  • author's profile photo Former Member
    Former Member
    Posted on Jul 19, 2016 at 11:46 AM

    gta service tax configuration in sap

    As per section 65B(26) of Finance act, 1994, “Goods transport agency” means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.

    As per notification 26/2012-ST dated 20.6.2012, Services of goods transport agency in relation to transportation of goods, service tax would be payable on 25% of value

    Total Transportation Bill Amount Rs-3000/- GTA will be charged on Rs 750/-

    GTA not applicable - if Total Transportation Bill Amount below Rs-3000/-

    If GTA not charged by the party journal will be

    31 32155 UGC Supply Chain Solutions Pvt 45,000.00- 40 416012 Carriage Inwd 45,000.00 50 161031 Payable ST 1,890.00- 40 271018 ST Rec (GTA) 1,890.00 50 161034 Payable Swachh Bhara 67.50- 40 441054 Swachh Bharat Cess E 67.50

    If GTA Charged by the party journal will be

    31 32155 UGC Supply Chain Solutions Pvt 46,957.50- 40 416012 Carriage Inwd 45,000.00 40 271018 ST Rec (GTA) 1,890.00 40 441054 Swachh Bharat Cess E 67.50
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