Please clarify the applicability of service tax in the following situation?
1.Mr. A has purchased rice 100qtls @2500/- amounting to Rs.250000 on ex-factory basis from B.The rice is sent to A through Transport agency for freight of Rs.32000/-. At unloading weight is 98qtls. Now there is shortage of 2qtls amounting to Rs.5000/-.So, A has deducted this amount of Rs.5000/- from the freight payable to GTA, and paid Rs.27000/- to GTA.
Please clarify whether service tax is applicable: a) on 32000/-.or b) On 27000/-
Please explain it because it is happening in every industry.
CAclubindia
