Service tax on freight outward

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 April 2012 We are manufacturer of trailers. We are paying freight outwards ranging from Rs1000 to Rs5000 per trip. Total amount per year is less than Rs50000. Do we have to register and pay service tax.

CA Ankit Gulgulia (Jain)

CA Ankit Gulgulia (Jain) (Expert)
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10 April 2012 Service Tax on Transport of Goods by Road is under reverse charge if u fall under seven categories such as Company , Reg. Dealer etc. Assuming you do then Liability is payer of Freight in simple terms.

Exemption is 750 on Consignment note basis. Small scale SP benefit( 10 Lacs) not available under reverse charge. So you need to register , Pay Taxes and file return irrespective of amount.

Dilip Darji

Dilip Darji (Expert)
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11 April 2012 Dear Sir.
As per proviso (ii) to Para No.(1) of Notification No.6/2005-ST dt.01/03/2005, as amended, the person prescribed under Section 68 (2) of The Finance Act are not entitled to avail SSI exemption. Under Section 68 (2) Central Govt. is empowered to notify such person (otherthan Service provider) in respect of any taxable service for payment of Service Tax. Rule 2 (d) (v)of Service Tax Rule, 199specifies that any personal liable to pay freifgght for transportation of thge goods, is the person liable to pay Service Tax.

All these technical information indicates that you are not entitled to avail any exemption from Service Tax. You need to pay Service Tax on freight charges paid by you to the transporter, irrespective whether you are providing any other taxable services or otherwise.

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CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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11 April 2012 Continue with answers given by experts-
You will liable for service tax on reverse charge basis undet GTA service only if the person providing transportation service is a GTA and issues a consignment note.
Otherwise, you will not be liable for service tax in GTA service.

CA Kishore Tallam

CA Kishore Tallam (Expert)
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11 April 2012 If u r any of the following persons, then only u r required to register and pay service tax else not required under reverse charge mechanism
1. Any factory governed by Factories Act
2. Any Company
3. Any Stautory Corporation
4. Any Registered Society
5. Any Cooperative Society
6. Any dealer of excisable goods.
7. Any Body Corporate
8. Any Parntership Firm

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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12 April 2012 You are paying transportation charges so you will be charged for this services by the transporters and you need not get yourself registered for transportation services