Applicability of service

This query is : Open

RAVI SONI (Querist)
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31 July 2013 M/S XYZ Pvt. Ltd. is a manufacturer of dry flowers and this company has all export sales, it engages a transport company who takes all the finished goods from its factory and delivers the goods directly at port from where the goods are exported outside India.

M/S XYZ Pvt. Ltd. is an exporter all the finished goods are exported out of India.

In this regard I want to know whether service tax will be levied on M/S XYZ Pvt. Ltd. as a service receiver accoring to notification no. 26/2012 under the category of " Goods Transport Agency ".

CA Suresh Jain

CA Suresh Jain (Expert)
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31 July 2013 Yes, Service Tax is payable. The amount of tax is to be calculated after taking the benefit of abatement under notification 26/2012(Provided CENVAT is not claimed). You are eligible for refund of service tax at actual or 0.18% of FOB value of export as may be opted by you

Gopalkrishna Hegde ,CA,DISA

Gopalkrishna Hegde ,CA,DISA (Expert)
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01 August 2013 Dear Ravi

I have slightly different opinion on the above for the following reason

1) I understand from above facts that xyz is the service receiver

2) Service receiver is engaged in export of goods. and is not providing the service of goods transport agency.

3)Hence Notification No: 26/2012 is applicable for service provided by goods transport agency.

4) Hence in this case the above notification may not apply

5) However since XYZ is service receiver, Notification No: 30/2012, that is reverse charge mechanism would apply being a body corporate.

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