S.Tax on Service of Logistic

This query is : Resolved

Parixit (Querist)
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07 May 2010 We are availing service of Logistic for transporting our material. They are raising monthly bill and charging service tax @ 10.30% on Total Bill with written note that service tax will be paid by consignor i.e. by us. As per my opinion Service Tax should be calculated on individual consingment mentioned in bill @ 2.58% instead on 10.30% of Total Bill, considering limit of Rs 750 per consignment. But my transporter is arguing & saying that in logistics Service tax is 10.30%

Shyam Lal Naik

Shyam Lal Naik (Expert)
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12 May 2010 What is the category of Service ? It appears that the service is "Goods Transport Agency" Service. It is fortified from the fact that there is a declaration that the tax will be paid by the consigner/consignee. Further, there is no service category by the name "Logistics".

The transporters argument does not seem to be correct.

Tax rate is 10.30% on 25% value of service(ie. after exemption of 75%).

In my view, even if, the transporter has charged tax on 100% value, 75% exemption can be taken for the purpose of remittance of service tax, after 01.03.2008, but not before that.

Further, amount upto Rs. 750/- per consignment is fully exempt.