As per Serial No. 7 of Notification 26/2012-ST, dated 20/6/2012, the service tax is payable for services provided by GTA on 25% of gross amount charged. The abatement of 75% of gross amount charged is permitted for determining the value on which tax is payable. This prohibits availment of credit on inputs, capital goods and input services used for providing taxable service.
With effect from 1/4/2015, amendment has been made vide notification no.08/2015-ST, dated 1/3/2015, which has reduced abatement from 75% to 70%. Thus service tax will be payable on 30% of the value as against 25% of the value with effect from 1/4/2015.
As per notification no 14/2015-ST, dated 19/5/2015, rate of service tax has been raised to 14% with effect from 1/6/2015, instead of 12.36% (Service tax 12%, Education cess 2% and Secondary and Higher Education cess 1%) up-till 31/5/2015
Illustrations:
Let amount of GTA service charged is Rs.50,000.00
Service Tax before 1/4/2015
Value of GTA service charged is Rs.50,000.00
Less: Abatement @ 75% Rs.37,500.00
Taxable value Rs.12,500.00
Service Tax on above @12.36% Rs.1,545.00
Service Tax after 1/4/2015 up to 31/5/2015
Value of GTA service charged is Rs.50,000.00
Less: Abatement @ 70% Rs.35,000.00
Taxable value Rs.15,000.00
Service Tax on above @12.36% Rs.1,854.00
Service Tax from 1/6/2015
Value of GTA service charged is Rs.50,000.00
Less: Abatement @ 70% Rs.35,000.00
Taxable value Rs.15,000.00
Service Tax on above @14% Rs.2,100.00
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