Goods Transport Agency

This query is : Resolved

raji p s (Querist)
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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?

Shyam Lal Naik

Shyam Lal Naik (Expert)
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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).

Dayal

Dayal (Expert)
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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.

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annapurna

annapurna (Expert)
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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.