Service tax on freight charged in invoice

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

27 June 2012 Dear Experts

I have a query:

Our suppliers are charging freight from us for the material being supplied by them.
There is a single invoice for price of materials on which they charge VAT/CST and then they add freight amount to it.

This is an ad-hoc amount as agreed by us and it can be more or less than the actual amount spent by our supplier in sending us the material. No lorry receipt/RR etc is attached by the supplier to his invoice.

Please guide me as to who is liable to pay service tax.

rgds

Pankaj

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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28 June 2012 The service recipeint is liable to pay service tax only if the service has been availed from a Goods Transport Agency.

In this case, the freight amount has been charged by the vendor and accordingly, the buyer is NOT liable to pay service tax on such amount.

Querist : Anonymous

Querist : Anonymous (Querist)

28 June 2012 Can the supplier rely on the dominant nature test and take a plea that since the dominant nature of the transaction is sale and the freight amount is negligible_the transaction should be considered as sale.

rgds

Pankaj

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Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2012 ............................................