01 February 2012
we are a registered company deals in trading of goods. we gives the supply of goods upto the client site through self owned transport vehicles. for this we use to raise two types of invoice one for material and second for transportation charges. now in this transaction who is liable to pay service tax our company or our clients?
01 February 2012
From the below text of the notification it is clear that Service tax is to be paid by the person paying frieght.
Notification No. 35/2004-ST has amended the Service Tax Rules, 1994 and Rule 2(1) (d) (v) has been inserted. The said Rule provides that in case the consignor or consignee of goods is- i)a factory registered under the Factory Act, 1948; ii)any company established under the Companies Act, 1956; iii)any corporation established under any law; iv)any society registered under the Societies Registration Act, 1860 or under any law corresponding to that Act in force in any part of India; v)any co-operative society established under any law;
vi)any dealer of excisable goods, who is registered under the Central Excise Act, 1944
vii)any body corporate established, or a registered partnership firm,then 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 is liable to pay service tax.
In cases other than those mentioned above, the goods transport agency itself is liable to pay service tax.
03 February 2012
As per above provision liability to deposit service tax is of the person paying freight. In your case you are both consignor and GTA and one can not make payment to himself or herself.And as per above fact it is clear that you are raising separate invoice for freight charges and getting payment from from consignee, therefore, it appears that in this case liability to pay service tax is of consignee if it is from organized sector.
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