Service tax on transportation
This query is : Resolved
25 January 2013
Our Company are providing transportation services to foriegn company for import of material in india,in that case our company will be liable to pay service tax.
Can u answer us what should be rate service tax ???
Is rate of service tax will be 3.09% or 12.36%
Waiting for your positive response.
Thanks
Can u answer us what should be rate service tax ???
Is rate of service tax will be 3.09% or 12.36%
Waiting for your positive response.
Thanks
25 January 2013
Hi Deepak,
First I want to mention that 75% rebate is for GTA only and GTA means an agency providing goods transport service by road only. But in case of import normally mode are vessel/air. In case of transport of goods by vessel rebate is 50%. Also if you are just facilitating the transport and taking facilitating charges then I think it should not be covered under GAT or transport by vessel.
regards
CA Vipin Jain
First I want to mention that 75% rebate is for GTA only and GTA means an agency providing goods transport service by road only. But in case of import normally mode are vessel/air. In case of transport of goods by vessel rebate is 50%. Also if you are just facilitating the transport and taking facilitating charges then I think it should not be covered under GAT or transport by vessel.
regards
CA Vipin Jain
Message likes :
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29 January 2013
Thanks for reply Vipin,
In this case there is transportation of goods by road in India(Mumbai Port to rajasthan), we are transport company, Our client is a foriegn company & That foriegn company will pay the frieght, who is not registered within Service tax Act, There is no office of foriegn company in India.
In that case we are liable to pay Service tax, I want to know at what rate we should charge service tax in invoice
In this case there is transportation of goods by road in India(Mumbai Port to rajasthan), we are transport company, Our client is a foriegn company & That foriegn company will pay the frieght, who is not registered within Service tax Act, There is no office of foriegn company in India.
In that case we are liable to pay Service tax, I want to know at what rate we should charge service tax in invoice
29 January 2013
Dear Hemant,
I am not sure whether reverse charge is applicable in this case or not. If you have any clarity pls. share.
In reversal charge notification on GTA reverse charge is applicable when person liable to pay freight is "BODY CORPORATE ESTABLISH, BY OR UNDER ANY LAW" ( mentioned relevant part only). I am not sure law here means Indian law or foreign law also. I think should be Indian law only. so reverse charge should be not applicable.
regarding rate of tax - abatement should be available so service tax should be paid on 25% value of freight.
regards
CA Vipin Jain
I am not sure whether reverse charge is applicable in this case or not. If you have any clarity pls. share.
In reversal charge notification on GTA reverse charge is applicable when person liable to pay freight is "BODY CORPORATE ESTABLISH, BY OR UNDER ANY LAW" ( mentioned relevant part only). I am not sure law here means Indian law or foreign law also. I think should be Indian law only. so reverse charge should be not applicable.
regarding rate of tax - abatement should be available so service tax should be paid on 25% value of freight.
regards
CA Vipin Jain
Message likes :
1 times
29 January 2013
ok, thanks Vipin for sharing your knowledge,
But i want a confirmation with notification, Than after i can quote my price to client.
But i want a confirmation with notification, Than after i can quote my price to client.
31 January 2013
Hi Hemant,
here is answer to this query.
First here we need to see who is the person liable to pay tax here and that we can find in Service Tax Rule,1994 Rule 2(1) (d) as per which in case of GTA person liable to freight is person liable to freight if he is one of the category. In present case foreign company covered under "any body corporate established, by or under any law". Body corporate has been defined under Service Tax Rules,1994 Rule 2 (bc) as defined under Companies Act,1956 Section 2 (7). In this clause body corporate includes company incorporate outside india. So foreign company covered under body corporate. Now under Proviso to Service tax Rules,1994 Rule 2 (1) (d) (i) mentioned that when such person is located in a non-taxable territory then provider of such service shall be liable to pay service tax. So in present case GTA is liable to pay service tax.
rebate must be available to GTA so service tax should be charged on 25% of freight value.
Hope query is resolved now.
regards
CA Vipin Jain
here is answer to this query.
First here we need to see who is the person liable to pay tax here and that we can find in Service Tax Rule,1994 Rule 2(1) (d) as per which in case of GTA person liable to freight is person liable to freight if he is one of the category. In present case foreign company covered under "any body corporate established, by or under any law". Body corporate has been defined under Service Tax Rules,1994 Rule 2 (bc) as defined under Companies Act,1956 Section 2 (7). In this clause body corporate includes company incorporate outside india. So foreign company covered under body corporate. Now under Proviso to Service tax Rules,1994 Rule 2 (1) (d) (i) mentioned that when such person is located in a non-taxable territory then provider of such service shall be liable to pay service tax. So in present case GTA is liable to pay service tax.
rebate must be available to GTA so service tax should be charged on 25% of freight value.
Hope query is resolved now.
regards
CA Vipin Jain
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