Applicability of Service Tax

This query is : Resolved

Lalit (Querist)
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05 September 2007 An Individual is owner of 40 Trucks. He place the trucks under the Goods Transport Operator who raises L.R. on the trucksof the owner. The owner of the trucks gets the amount of freight at the stipulated rate by the higherer( Transport Operator )on raising the invoice to the Truck Transport Operator. The Owner of the Trucks get the fright net amount after the deduction of diesel and other trip expenditure from the higherer. The Transport operator deduct TDS on the payments given to the Truck owner as TDS on Higher Charges. My Qurry is whether the Truck owner is liable to raise Service Tax on the amount received from the Transport Operatr or the income is treated as Higher Charges Income of the Trucks. Also for the Tax Audit purpose whether his gross income is treated as turnover or the net amount after deduction of the expenditure will be treated as his income because as per the custom of the business it is not possible to get the supportings from the Transport operator regarding the trip expenditure. He provides only monthly statements.

Shyam Lal Naik

Shyam Lal Naik (Expert)
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06 September 2007 Service Tax is applicable on Goods Transport Agency, not on Goods Transport owner.

Based on the facts mentioned in your query, the truck owner is not liable to service tax.

For tax audit purpose, Gross income should be considered.