Dear Readers,
One of my client companies say M/s. X is a Paper (News Print in Reels) Manufacturing Company. The company receives raw material (old / waste news paper) from its creditors.
Lorry freight on purchase of goods is being paid by the company as follows.
Case 1. The company pays Lorry Freight Amount and adjust the same with amount payable against purchase invoice. i.e., Item rate in Purchase Invoice is inclusive of freight. Case
2. The company pays lorry freight amount and recorded in the books as Carriage inwards which is debited to P&L A/c. i.e., Purchase Invoice will not include any freight amount.
Please guide me what is the applicability of Service Tax Payable, as the company is registered under "Transport of Goods By Road" Service in following two cases.
Case 1. The lorry owner is individual and is not provided any LR / bill and not charged any service tax.
Case 2. The lorry owner is a registered Transporter and charging service Tax @ 10.3% on 25% of LR value.
Thanks in advance for your valuable reply.
With Regards,
Sidhardh
CAclubindia
