Service Tax liability on Incoming Material

This query is : Resolved

Rajeev Kashyap (Querist)
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22 April 2009 Pls guide me whether i will be able to pay service tax on incoming material or not in both cases. Whether vendor is charging tentative cost of freight or getting reimbursed of freight paid by him.

Dayal

Dayal (Expert)
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22 April 2009 As per rule 2(1)(d)(v) of Service Tax Rules, Consignor or consignee who is paying freight will be liable to pay service tax, if consignor or consignee is any one of the following –

any factory registered under or governed by the Factories Act, 1948 (63 of 1948)

any company established by or under the Companies Act, 1956 (1 of 1956)

any corporation established by or under any law

any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India

any co-operative society established by or under any law

any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder

any body corporate established, or a partnership firm registered, by or under any law

If you fall in any one of the above category of persons and is paying freight , then service tax is payable and in this case GTA is absolved from the liability as it is to be paid by the person paying freight.