TDS and Service Tax

This query is : Open

CA Nitin Wadhwani (Querist)
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24 April 2009 A Partnership Firm is purchasing chemicals from a limited company which is sold in transit to another entity i.e sec.6(2) sales the format of invoice is follows:

Basic Price xxxxxx
Excise xxxxx
Education Cess xxxxx
H.E.C xxxxx
Sub-Total xxxxxxxxxxxxx
CST xxxx
Sub-Total xxxxxxxxxxxxx
Freight xxxx
Grand Total xxxxxxxxxxxxx

The Freight is paid by the buyer.

There are two questions:
1.Whether Tax is to be deducted u/s 194C for the freight paid?
2.Whether the buyer being not the consignee is liable to pay service tax under Transport of goods by road as a service receiver.

Dayal

Dayal (Expert)
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26 April 2009 1. How can you deduct TDS, freight is part of the sale cost and not a service.

2. It is the person who is paying freight is liable for service tax.

It is either the consignee or consignor, who is liable to pay under the provisions, here the onus is on the buyer as he is paying the freight, please ensure this from the buyer or it may be left out to you........

CA Nitin Wadhwani

CA Nitin Wadhwani (Querist)
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26 April 2009 Dayal, here freight does not form part of sale price since CST is levied ex-freight.
So that's why i am in confusion that whether tax should be deducted or not?
If instead of showing freight in the invoice itself, if it's shown or collected through a separate invoice or debit note then tax is deducted or not?
If yes, then tax should be deducted also if the freight is shown in invoive ex-VAT or CST.

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CA Nitin Wadhwani

CA Nitin Wadhwani (Querist)
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27 April 2009 .