25 December 2013
Queries with regard to payment of service tax on freight (Transportation of goods by road)
1 Some vendors charge freight in lumsum or @ per kg, per packet etc without any supporting of L.R. Query:- In above case whether we are required to pay any service tax Checklist:- The vendor is not a goods transport agency The vendor is recovering the amt in bill but does not issue any consignment note
2 Some vendor pay freight to transporters & collect the same from us by issuing dr note for The amt. Query:- In above case whether we are required to pay any service tax Checklist: - The vendor is not a goods transport agency The vendor is recovering the amt in bill but does not issue any consignment note
3 Some vendors pay freight to transporters & collect the same from us by charging the same in Bill Query:- In above case whether we are required to pay any service tax Checklist: - The vendor is not a goods transport agency The vendor is recovering the amt in bill but does not issue any consignment note
4 Some local tempowala are not registered with service tax dept. They do not issue any consignment note or L.R Query:- In above case whether we are required to pay any service tax if The total tempo charge paid for one transaction is more than Rs.1500/- Checklist: - The tempowala is a goods transporter. The tempowala does note issue any consignment note
5 whether issue of D.O. may be termed as consignment note
6 whether terms of po will make any diff in payment of service tax liability a terms may be: I Ex works/ex mill Ii Door delivery
7 We are selling the goods on ex mill terms. We send the goods to consignee &the consignee Pays freight. He is a non specified person, in individual Query:- Whether we are liable to pay service as a consignor if the L.R. is above Rs.750/- Whether we are liable to pay service as a consignor if the FTL is above Rs.1500/-
8 As per Notification No 15/2012 dt 17.03.2012 wef from 01.07.2012 in case of GTA the person receiving the service has to pay 100% service tax .pl explain the same in detail as to in which cases we have to pay service tax as a recipient of service.
9 We are importing machineries from various countries. The containers with machineries are brought to Navaseva port. From Navaseva the machineries are taken to our factories at Tarapur/Silvassa. Query:- In the above case the transporter do not issue us any consignment .pl inform whether we are liable to pay service tax as a receiver of services.
in relation to service provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road, where the person liable to pay freight is,—
(I) any factory registered under or governed by the Factories Act, 1948 (63 of 1948); (II) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India; (III) any co-operative society established by or under any law; (IV) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder; (V) any body corporate established, by or under any law; or (VI) any partnership firm whether registered or not under any law including association of persons;
any person who pays or is liable to pay freight either himself or through his agent for the transportation of such goods by road in a goods carriage provided that when such person is located in a non-taxable territory, the provider of such service shall be liable to pay service tax.
and in a case other than above the provider of service shall be liable for paying service tax.
“consignment note” means a document, issued by a goods transport agency against the receipt of goods for the purpose of transport of goods by road in a goods carriage, which is serially numbered, and contains the name of the consignor and consignee, registration number of the goods carriage in which the goods are transported, details of the goods transported, details of the place of origin and destination, person liable for paying service tax whether consignor, consignee or the goods transport agency.
Any goods transport agency which provides service in relation to transport of goods by road in a goods carriage shall issue a consignment note to the recipient of service. Provided that where any taxable service in relation to transport of goods by road in a goods carriage is wholly exempted under section 93 of the Act, the goods transport agency shall not be required to issue the consignment note.
If you are falling in criteria of factory, society, dealer of excise goods etc. then if you are paying freight not directly but via vender of the goods then only you are liable to pay service tax. In any other case you are not service provider and not liable to pay service tax.
For query 1 to 4 non availability of the consignment note have no effect on the liability to pay service tax.
For query 5 if Delivery Order reveal the information detailed above it may be considered as consignment note.
For query 6 term of purchase order do not alter the liability of service tax if seller paid transportation on behalf of the buyer. However if Ex works / Ex Mill / Till Door Delivery terms clearly defined that the procurement cost shall inclusive of all ancillary and incidental expenses to make goods at that state, such expenses only shall not be born by buyer if delivery or contract terminated by them and none of such expenses shall be born by the seller as an agent of the buyer then such expenses have no separate identity and form cost of goods procured. No service tax liability in such case due to no transportation.
In Query 7 if consignee pays freight directly to the transporter there is no service tax liability on your part. However if you collect freight and pay to the transporter and falls in the criteria of person liable to pay tax then you are receiving freight as an agent or service provider and liable to pay service tax.
For query 9 since goods received at factory the owner of the factory falls in the criteria of person liable to pay service tax. From port to factory transportation cost is born by you. Non availability of consignment note have no effect on service tax liability.
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