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Liability of services on composite or bifurcated basis, Service Tax |
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Liability of services on composite or bifurcated basis |
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The basis of procurement of any material is FOR basis.Whether there is any liability of service tax involved wrt transportation element involded in the rate to the seller or the buyer if a)the rate is divided in cost of material & transportation charges b)there is single composite rate for the supply of material.
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The person who pays to the transporter is liable to pay service tax in the capacity of consingor / consgnee. Your treatment in books of account or manner of presentation in the bill are irrelevant factors to decide the service tax liability.
Service tax on transportation is payable by a person paying freight. If material is supplied on FOR basis, the buyer has no liablity to pay service tax. However, as the seller is paying freight and supplying to seller whether by including the cost of transportation in cost of material or not, he is responsible to pay service tax.
If it is for delivery at buyers place then only the seller would be liable. If composite also only seller would beliable . In both cases if seller is an individual then the liability would shift back to the GTA.
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