Query regarding service tax

This query is : Resolved

CA. S.K. Upadhyay (Querist)
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02 August 2014 Dear Sir

I have following queries regarding service tax:
Situation No 1. We issue sale invoices and also charges freight outward.
Case 1. when we charges service tax @12.36 on freight outward
Example:- Sale value- Rs 1000000.00
Freight Outward -Rs 40000.00
Service Tax Charge- Rs 4944 (@12.36% of 40000)
Total Bill Amount- 1044944.00
Case 2:- When we don't charges any amount on account of service tax.
Example:- Sale Value- Rs 1000000.00
Freight Outward- Rs 40000.00
Total Bill Amount-1040000.00\
Situation No-2. We issue sale invoice and don't charge freight outward in invoice.and We paid directly to transporter.
Sale Value-Rs 1000000.00
Total Bill Amount- Rs 1000000.00
And we bear freight cost on above Rs 50000 and paid directly to transporter.

Question No.1 what is the rate of Service tax in case 2 under Situation no 1
Question No.2 what is the rate of Service tax under Situation no 2.
Question No.3 whether the above both situations are come under reverse charges or not.
Question No.4 If above situations are come under reverse charges then those cases comes under which services heads
Question No.5 Whether we can adjust Service Tax input against Service tax payable on above situations.
Question No.6 The Period during which we can take input of service tax.

Annu Agarwal

Annu Agarwal (Expert)
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03 August 2014 As per my view the first thing to be considered is:
1.Service tax is paid on freight where the goods are transported using Goods Transport Aency service
2.Service tax is not levible on transportation of goods by road otherthan by Goods Transport Agency (Sec 66D,Serial no.(p)

Second thing to be considered is that service tax in case of GTA is to be paid under reverse charge where the personliable to pay freight is any one of the following
1.A factory
2.A society
3.A excisable dealer
4.Any body corporate
5.Any coopertive society
6.Any patnership Firm
(Service Tax Rules,rule 2(d)

Now,in case 2 of Situation 1:
1.Assuming that the service of GTA is involved and the Consignee is a specified person ,then service tax shall be paid @ 12.36%*25% i.e.3.09% under reverse charge by consignee.

In case of situation 2
you are paying freight to the GTA & fall in defintion of specified person ,so you shall be paying service tax @ 3.09%.

(In question 1 and Question 2 service provider is GTA)

Answer to question No.3
Yes both the situaution are covered under reverse charge mechanism as per my view.

Answer to Question 4
Service head is Transport ofGoods BY Road (262)

Answer to Question 5
We cannot adjust service tx input against Service tax payable under Reverse Charge.

Answer to Qusetion 6
Cenvat credit of the serice tax paid is available on orafter the day on which payment is made of value of input service tax.(Rule 4(7) of CCR)