Service tax on gta
d. chandra sekhar
(Querist) 22 December 2011
This query is : Resolved
Service Tax Department has issued a demand notice for payment of service tax on provisions (current liabilities) mentioned in Balance Sheet.
My client utilize lorries for transportation of commodities to different places in A.P. He got the service tax registration as GTA. For that, he will pay service tax on the payments made to lorry owners as per the service tax provisions. At the end of year my client provide provision in balance sheet for payments of lorry freight to different lorry owners. The contention of the department is service tax is also applicable on the provisions provided in balance sheet.
Can any one clarify this matter or if any judgments available on this issue?
Raj Kumar Makkad
(Expert) 23 December 2011
It shall be better for you to post your query in appropriate forum www.caclubindia.com instead of here.
soumitra basu
(Expert) 25 December 2011
Service tax shall not be applicable on the basis of provision created in balance sheet. It shall be payable on strict application of law. Amount received against bills submitted to client is only liable for service tax. It is immaterial what the department people is saying.
