29 August 2010
Mr. X hires trucks from party Mr. Y and uses them towards goods transport for party Mr. Z, and charges Mr. Z for this. Mr X pays Y the hire charges charged by Mr. Y.Now if Mr. X's receipts go above 1000000/- will it be mandatory for him (Mr. X) to apply for a service tax number? Does such kind of service come under the Service Tax? If yes under which service?
29 August 2010
1. U/s 69, Any person liable to pay service tax must mandatorily make an application (in form ST-1) for the registration to the respective Superintendent of Central Excise. now, i come to ur query, receipt of Rs 10,00,000 is the sale value of the goods sold by Mr. X and not the service charges. further he charges the paid service tax from its client, so it is required to take the registration as per rule 4 and section 69.
30 August 2010
Mr. X hires trucks from party Mr. Y and uses them towards goods transport for party Mr. Z, and charges Mr. Z for this. Mr X pays Y the hire charges charged by Mr. Y.Now if Mr. X's receipts go above 1000000/- will it be mandatory for him (Mr. X) to apply for a service tax number? Does such kind of service come under the Service Tax? If yes under which service?
Mr X is providing services of Transport of goods by Road
For all purposes Mr. X is not liable to charge service tax, neither seek registration under service tax.
The rule clearly implies that the recipient Mr. Z is liable to pay service tax on the Freight amount after considering 75% abatement.
Even if Mr. X’s Income crosses 10 lacs , he is still not liable to seek registration
However you have not clarified as to the arrangement between Mr X and Mr Y, is for lease of trucks , if yes whether the right to use clause is addressed in the agreement, else this could attract service tax, if right to use clause is addressed then VAT is applicable.
CAclubindia
