Whether Service tax for Freight should be collected from the transporter or it should be paid out of own money by the service receiver?
15 Replies
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 07 June 2011
there r types of treatment made by transporters. they print on their invoice as
service tax to be paid by
cosignor
consignee
transporter
and they tick respective column
rectify me if i am wrong
CA AMANPREET SINGH
(Chartered Accountant)
(284 Points)
Replied 07 June 2011
Transporter is a SERVICE PROVIDER and you cannot recover Service tax from provider.
Final burden of Service tax is on Service Receiver. so Service Receiver has to pay out of his own money.
i have answered assuming that you are talking about Reverse Charge.
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 08 June 2011
For specified service recivers the consignor/ consignee would be liable. If not specified then the GTA would be liable.
deepa
(CA)
(79 Points)
Replied 08 June 2011
I also hav a query...In case of GTA if the sevice receiver is a partnership firm and it is registered only under up vat rules ,then will it be covered under the specied persons required to pay sevice tax??
Malika Sharma
(student)
(133 Points)
Replied 08 June 2011
it is assumed that service tax amount is already included in invoice and service receiver has to pay the amount of invoice which includes service tax amount to the service provider. so in this case service receiver has to pay service tax of frieght to the service provider here to transporter...rectify me if m wrong somewhere..
CA AMANPREET SINGH
(Chartered Accountant)
(284 Points)
Replied 08 June 2011
I think here Registered Firm means Firm registered with Registrar of Firms
correct me if i m wrong
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 08 June 2011
Agree with Amanpreet Singh
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 08 June 2011
As a service receiver, You are liable to pay service Tax On GTA service and you cannot collect this service tax amount from transporter concerned.
Under Service Tax, Tax is ultimately going to be paid by service receiver. For services other than GTA, service provider charged u service tax and remitt the same to government.thus it is indirect way of payment of Service tax by service receiver And in case of GTA service, service tax directly paid by service receiver to government instead of routing it through service provider. Thus service tax paid by service receiver or service provider, ultimate burden of the ST is on the service receiver. Service provider is only middleman on behalf of government to collect the TAX from service receiver and pay it to government. So no need to collect taxes from transporter.
Thanks and regards,
Manoj B. Gavali
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 08 June 2011
| Originally posted by : deepa | ||
 |
I also hav a query...In case of GTA if the sevice receiver is a partnership firm and it is registered only under up vat rules ,then will it be covered under the specied persons required to pay sevice tax?? |
 |
registration under govt rules confirms the registration of "partnership firm" as it hold a PAN in name of partnership, so on mere on the grounds that firm is not registered with "regitrar of firms" does not allow them to escape from statuary liability of service tax, its lapse by the partners that they have not registered the firm with "regitrar of firms", but they can not deny the statuary liabilities.,
Pralay Chakraborty
(Service)
(482 Points)
Replied 10 June 2011
If the burden of payment of Service tax is on Service receiver,then Service receiver need to pay S.tax out of own pocket.On that case invoice raised by the GTA should not include Service tax & should mention that GTA has not availed Cenvat Credit.(notification No. 12/2003; Circular No. B1/6/2005-TRU dated 27-7-2005 para 31.1)
Service receiver has to calculate the S.tax portion of the said invoice,and pay S.Tax to the govt. after considering abatment,exemption,if any.
Thnks,
CMA.Pralay Chakraborty
(Cost & Management Accountant)
Pralay Chakraborty
(Service)
(482 Points)
Replied 10 June 2011
@ Manoj B.Gavali : U mentioned,"For services other than GTA, service provider charged u service tax and remitt the same to government." I think not in all Cases other than GTA service provider need to remitt S.Tax to the govt.
Another Case where Service receiver need to pay S.tax on Reverese Charge basis is Services provided by a foreign commission agent.
for ref go through it please--
Under Notification No.18/2009-ST dated 07.07.2009, the following two services have
been exempted, if they are used for export of goods and where the liability to pay the tax
on such services is on the exporter himself, on reverse charge basis,-
(i) Transport of goods by road, from the place of removal to any ICD, CFS, port
or airport; or from any CFS or ICD to the port or airport; and
(ii) Services provided by a foreign commission agent for procuring orders.
subject to fulfillment of conditions as set out in the said notifications.
Thnx,
CMA. Pralay Chakraborty
(Cost & Management Accountant)
hanamshet
(CONSULTANT)
(176 Points)
Replied 14 June 2011
The obligation to pay service tax in respect of transport of goods by road is on the receiver of services as per the Serviced Tax Notification issued in 2004. Manufacturers/ registered dealers /societies etc have to pay the service tax on GTA services received by them. The Goods Transport Agency has to mark the consignment note as to who has to pay the servicve tax i.e consignor/consignee/ or transporter. Transporter has to pay the servbivce tax in respect of services prov ided by him to other than six persons mentioned in the notification No.36/2004 which reads as under::
| “(v) | in relation to taxable service provided by a goods transport agency, where the consignor or consignee of goods is,- | ||
| (a) | any factory registered under or governed by the Factories Act, 1948 (63 of 1948); | ||
| (b) | any company established by or under the Companies Act, 1956 (1 of 1956); | ||
| (c) | any corporation established by or under any law; | ||
| (d) | any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India; | ||
| (e) | any co-operative society established by or under any law; | ||
| (f) | any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder; or | ||
| (g) |
any body corporate established, or a partnership firm registered, by or under any law,any person who pays or is liable to pay freight either himself or through his agent for the transportation of such goods by road in a goods carriage. lanation.- For the purposes of this rule and the second proviso to rule 4A, “consignment note” means a document, issued by a goods transport agency against the receipt of goods for the purpose of transport of goods by road in a goods carriage, which is serially numbered, and contains the name of the consignor and consignee, registration number of the goods carriage in which the goods are transported, details of the goods transported, details of the place of origin and destination, person liable for paying service tax whether consignor, consignee or the goods transport agency
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