A tiles manufacturing company , if use its own truck for transportation of goods from its plant to a customer places for delivery purpose , whether service tax are applicable on this freight charges ? provided company's main business is to manufactur tiles and not of providing transportation servise.
6 Replies
Harendra Kumar
(Tax Advisor )
(1326 Points)
Replied 13 June 2014
Yes, Service tax is applicable on this process but you adopt the driver as his employee then Service Tax is not applicable on such service. Hope you got if not plz forward the same.
Gangatharan
(Partner)
(108 Points)
Replied 13 June 2014
Sorry for interpreting...
Manufacturer owns a truck. then how ST ll applicable sir??
There ll not be any expenditure in books..
then how we can charge RCM sir?
Thank you,
Karthik.V.Kulkarni
(Chartered Accountant)
(594 Points)
Replied 14 June 2014
Hi Hardik,
Service tax is not applicable in this case. Cost of transportation is includable in the assessable value as per Central Excise Act 1944. You have to pay excise duty on the cost of tiles + Cost of transportation. It is an ancillary service provided in the due course of manufacturing, not a stand alone service thus no service tax.
As per Section 66D(p) of Finance Act Services by way of transportaion of goods by road except the services of-
A) GTA
B) Courier agency are specified under negative list
Thus the service by way of transportaion are not liable to service tax but excise duty.
Arun Kumar Singh
(GST Advocate)
(15220 Points)
Replied 14 June 2014
Dear Gajera,
If transportation charges are encludes in the value of tiles then no need to pay service tax of service recepient.
Manish
(Finance Professional)
(28 Points)
Replied 15 June 2014
If value charged from the buyers includes the transportion charges (which obviously be the case), the service tax is not payable.
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