Goods Transport Agency
This query is : Resolved
04 January 2008
If a factory appoints an intermediary,say, an individual, who is responsible to arrange for goods transport facility, who is liable to pay service tax?
06 January 2008
The consignor / consignee, who ever pays the freight is liable to pay service tax in this case(since you are a factory).
06 January 2008
There is no escape, though you may not prefer to pay freight, still you will be paying to intermediary who will be subject to service tax on the services rendered.
There you will land up paying more
It would be ideal to pay yourself as this will reduce your cost of service tax as you are eligible for 75% abatement
However if you think that the service provider will fall under threshold exemption, then it is debateable as you may asked to pay since you are reimbursing freight to the intermediary.
Also ther is bound to be doubel taxation cost as service tax will be paid by intermediary on freight as well as on the services rendered
You may kindly review your position in the matter.
There you will land up paying more
It would be ideal to pay yourself as this will reduce your cost of service tax as you are eligible for 75% abatement
However if you think that the service provider will fall under threshold exemption, then it is debateable as you may asked to pay since you are reimbursing freight to the intermediary.
Also ther is bound to be doubel taxation cost as service tax will be paid by intermediary on freight as well as on the services rendered
You may kindly review your position in the matter.
08 January 2008
As per rule 2(1)(d)(V) provides that the amount may be paid to the transporter either by the person himself or through the agent.So in such case the agent will be liable to pay the service tax to the GTA.
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