Payment of Service Tax by Consignor

This query is : Open

N.GIRIPRASAD (Querist)
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30 March 2010 If a consignor pays service tax in his bill & recovers the same from the consignee, will he be justified in charging 10.30 % on the basic freightn rate or should he charge based on abatement value i.e, 10.30 % of 25 % of the basic freight rate charged. If he charges at a higher rate as stated earlier then will corrections in his bill be required.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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31 March 2010 General- The payment of GTA liability on 25% is unconditional and every service reciver can opt for the same.

Where the consignor recovers the same from consignee, it means that he is paying the freight on behalf of the consignee. In this case the payment of ST should be by the consignee since he is the person responsible to pay the freight. There seems tobe a problem here.