19 April 2009
If co. purchase goods and invoice is in such manner:
Particular Qty. Rate Value Item 7000 100 700000 Add: Vat @ 4% 28000 Less: Freight 3000 _______ 725000 _______ And Purchasing co. pays freight of Rs. 3000/- to transport agency on behalf of Selling Co(Consignor). Now please tell me who is liable to pay service tax on freight.
20 April 2009
The provision talks of paid by the consignor/ consignee or on his behalf. In this transaction, the consignor is required to pay but asks the consignee to pay on his behalf. The ST is liable to be paid by the consignor in my view. In his books also the consignor will book sales of 725,000 and freight of Rs.3000/- as expense. In the consignees books the frieght will be a set off account with balance = 0.
CAclubindia
