Applicability of Serv.Tax paid on beh'f of customers
This query is : Resolved
11 April 2009
Dear Experts,
My query is regarding Outward Freight [Carriage Outward] paid on behalf of Customer..see the points below..
1.We are making the freight payments on behalf of our customers and later on charging the same to the customers in access of Invoice Value
2.Our Transporters/Courier companies are raising the bills on monthly basis to us on which they are charging the Service Tax as applicable %
Pls.clarify whether still such expenses are liable for Service Tax ?
Sometimes it happens that we might get the 100% of the freight paid on behalf of customers and also possible of not getting the full amount paid...
My query is regarding Outward Freight [Carriage Outward] paid on behalf of Customer..see the points below..
1.We are making the freight payments on behalf of our customers and later on charging the same to the customers in access of Invoice Value
2.Our Transporters/Courier companies are raising the bills on monthly basis to us on which they are charging the Service Tax as applicable %
Pls.clarify whether still such expenses are liable for Service Tax ?
Sometimes it happens that we might get the 100% of the freight paid on behalf of customers and also possible of not getting the full amount paid...
11 April 2009
You have somehow mixed two different elements
One is outward freight paid on behalf of the customer and the same is charged back to the customer under an Invoice
But what are you invoicing the customer other than freight
Who are your customers and what is your business activity.
Your second point, if you are a company then the transporter cannot charge you service tax, as it is payable by the consignor or consignee and not the transporter.
Courier companies are liable to charge and will charge as it is a notified taxable service and different from transporters
One is outward freight paid on behalf of the customer and the same is charged back to the customer under an Invoice
But what are you invoicing the customer other than freight
Who are your customers and what is your business activity.
Your second point, if you are a company then the transporter cannot charge you service tax, as it is payable by the consignor or consignee and not the transporter.
Courier companies are liable to charge and will charge as it is a notified taxable service and different from transporters
12 April 2009
Dear Mr.Dayal,
Thanks for your comments, let me clarify..
1.We are a manufacturing company and supplying specialty chemicals to Customers across India.
2.Regarding Invoice..it's a Sales transaction with Excisable Tax Invoice..
ie..
Product A : Qty : 50 Rate 100 = 5000
+ Excise + Vat + Freight
We have a rate contract agreement with TNT and they are raising the invoice on monthly basis charging service tax..
We are charging the freight let say..Rs.5/- a kg in access of the Bill Value after VAT/CST to our customers..
For us TNT is a transporting company as we are sending commercial goods weighing 50 to 1000 Kgs ..
Would be great to see your further comments on the same...Thanx
Thanks for your comments, let me clarify..
1.We are a manufacturing company and supplying specialty chemicals to Customers across India.
2.Regarding Invoice..it's a Sales transaction with Excisable Tax Invoice..
ie..
Product A : Qty : 50 Rate 100 = 5000
+ Excise + Vat + Freight
We have a rate contract agreement with TNT and they are raising the invoice on monthly basis charging service tax..
We are charging the freight let say..Rs.5/- a kg in access of the Bill Value after VAT/CST to our customers..
For us TNT is a transporting company as we are sending commercial goods weighing 50 to 1000 Kgs ..
Would be great to see your further comments on the same...Thanx
12 April 2009
the courier company will charge the service tax from you irrespective of fact whether you get it colleted or not
12 April 2009
Yes.
You have to charge service tax on the freight amount.
You have to charge service tax on the freight amount.
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