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Service tax on gta

Rameshwar Agrawal (Account & Finance MGR) (54 Points)

19 July 2012

we are a pvt ltd company and provide transportation service to various companies by trucks owned by us as well as hired from other. some time we issue our own consignament note for hired trucks also. my question is who is liable to pay service tax:

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5 Replies

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 20 July 2012

If you are charging for the transportation of a non-agricultural produce then service tax liability is of the person who is paying the freight may it be the consignor or the consignee.

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Rameshwar Agrawal (Account & Finance MGR) (54 Points)
Replied 20 July 2012

thanks for reply.

we provide transportation for non agricultural produce only.

further an agreement is made between us and client about the terms and conditions.

there are two situations: we provide service by using

1.Owened Trucks

2.hired trucks -

in both the cases we raised invoice on client and he makes the payment to us. we pay to transporter's for trucks hired by us. need clarity on following points:

a.- how and by whom service tax will be paid to Govt after 1st July'12.

b. should we pay service tax on trucks hired by us?

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 20 July 2012

If the agreement between you and the transporter is of hiring of truck wherein the truck is used by your own and for the freight charges in turn you are raising the consignment note to your customer then service tax will be paid by the truck owner on the rent charges and by your customer on GTA service. But if the consignment note is raised by the transporter in your name then service tax will be paid by you under reverse charge @ 25% of the amount of freight paid to the transporter.

R.Guru (Accountant) (30 Points)
Replied 21 July 2012

Dear Experts,

we are manufacturer and purchasing of raw material from otherstate supplier they are freight charges mentioned in the excise invoice and they are also raising separate invoice of service tax on freight charges we are also paid the same

my quiery is whether can we availed the service tax or not

pls advise

R.Guru

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 21 July 2012

If you want to avail the CENVAT credit it would be advisable to inform your supplier not to show freight charges in the excise invoice and bill for it separately. Also ask the supplier to put the consignor's name as your company name c/o the supplier and then you reimburse the amount and avail the credit on the same after paying tax on GTA service.