Apllicability of reverse charge mechanism

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2013 Suppose, A Constructions (Buldings) & Developmets Company, makes payments to Individual Transporter for sfifting the Household materials of Owner's of Flats to vacant the Rooms.
So, Service Tax (RCM) will Be applicable to Comapany for shifTing Household materials?

RENGARAJ R.K

RENGARAJ R.K (Expert)
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31 July 2013 PLEASE TELL US WHETHER SUCH TRANSPORT CHARGES ARE BOOKED IN THE COMPANY'S ACCOUNTS AS FREIGHT?

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CA Suresh Jain

CA Suresh Jain (Expert)
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31 July 2013 As per Section 65B (26) "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;

The individual transporter referred by you does not issue any sort of goods receipt and therefore, can not be considered to be a GTA and consequently RCM is not applicable.

In this case the service provider is to be treated as Courier service under clause 20 of section 65B which is reproduced below :-
"courier agency" means any person engaged in the door-to-door transportation of time-sensitive documents, goods or articles utilising the services of a person, either directly or indirectly, to carry or accompany such documents, goods or articles

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Querist : Anonymous

Querist : Anonymous (Querist)

01 August 2013 Thanks a Lot Sir...

Suppose these are shown as Shifting / Transportation Charges as Direct Expenses,
or
shown as Rent Compensation (Direct Expenses) paid to Owners of Flat, and transferred to WIP.

Transporter issues Bill containing the path of shifting and Loading & Unloading Charges.
No Service Tax(Not Registered).

CA Suresh Jain

CA Suresh Jain (Expert)
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01 August 2013 a compensation paid to the Customer by a builder for non-delivering the flat as per schedule, could be claimed as discount which is not taxable as service tax as it would be a reduction in sale price. This will also reduce the amount on which service to be paid for construction and sale of flat

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Querist : Anonymous

Querist : Anonymous (Querist)

02 August 2013 Thanks a lot Sir.