NOTICES ISSUED TO COs CLAIMING ABATEMENT ON PAYMENTS TO GTA

Trouble seems to be brewing up for companies availing services of Goods Transport Agencies (GTAs). The service tax department has issued show cause notices to them for claiming abatement for service tax on payments made to GTA. The issue of claiming abatement for service tax on payments made to GTA has been hanging fire for quite some time. While the Central Board of Excise and Customs had said the companies could claim an abatement of 75%, the Comptroller and Auditor General (CAG) had raised objections to it. In wake of CAG objection and no clarification on the issue, the field formations have raised demands and show cause notices have been issued.

Editorial Note :
The show cause notices are illegal. The abatement circular is binding on the Government.