Service tax on freight

This query is : Resolved

NARESH KUMAR SHARMA (Querist)
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31 August 2011 Case: A manufacturar sales goods as under to parties

Sales price of goods 150000
Taxes etc. 5000
freight charges 10000
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165000/-
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thus he charged freight rs. 10000/- in invoice however actual freight paid by him to transporter is rs. 8000/-

Question ; on which amount the manufacturar is liable to pay service tax, either on rs. 10000/- or rs. 8000/ (actually paid to tpt.)

kindly advice with relevant sectiion and case law.

U S Sharma

U S Sharma (Expert)
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31 August 2011 1. GTA services availed is 8000/- so he is liable to pay service tax on 8000/-

2. as he has charged 10000 in invoice, so how he can reconcile the accounts, as he is not service provider, and he can nt make profit on such transactions,

advised to make loading, handling charges to the tune of short paid GTA to neutralize the diff.