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Service Tax on Goods Transport Agency: An analysis of person who is liable to pay Service Tax”

Service Tax - By: - SAKTHIVEL PONNUSWAMY - Dated:- 11-4-2015 Last Replied Date:- 8-3-2016 - Service Tax on Goods Transport Agency: An analysis of person who is liable to pay Service Tax Generally there is a notion that transporter is exempted from payment of service tax and only the person who pays the freight is liable to pay service tax. But it is not the case, still transporter is liable to pay service tax if the service recipient is other than the following as per the notification No. 30/201 .....

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ny law; or (f) any partnership firm whether registered or not under any law including association of persons; The person who pays or is liable to pay freight for the transportation of goods by road in goods carriage, located in the taxable territory shall be treated as the person who receives the service for the purpose of this notification. Further Services provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road only covered under this notific .....

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middle men between ABC limited and the transporter. Transporter is providing transport service to the XYZ Limited on behalf of Mr. A and Mr. A is paying the freight to the transporter. Finally Mr. A got reimbursement of the freight amount form ABC limited and received commission for his services. ABC Limited raises freight bill to the XYZ limited with its margin. In the above example we need to identify the following:- Goods transport agency Person who paying the freight to the transporter Pers .....

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is acting as middle men between ABC limited and the transporter. And also as per the understanding between Mr. A and the transporter, transporter is raising consignment note in favour of XYZ Limited who is the actual consignee also. If we look into the reverse charge mechanism Mr. A is not covered under the reverse charge mechanism and transporter is liable to pay service tax. From the point view of the transporter he is providing his service to the body corporate and also raising consignment n .....

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to constitute freight payment as this is only reimbursement from XYZ limited and also there is no consignment note in favour of ABC Limited. As far as XYZ Limited is concern there is no separate freight payment as this freight payment is included in the material cost in the invoice raised by ABC Limited. If this is the contention, who will be paying the service Tax on freight? Will continue....... Thanks and Regards, SAKTHIVEL PONNUSWAMY M.Com, ACA 68, Green Garden, Avalapalli Road, Hosur, Tami .....

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has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without author s written permission. - Reply By KAMARAJ RENGARAJ - The Reply = Dear Sir,Can you please throw some light on the service tax liability in the following scenario under RCM:1) Mr A is an individual lorry owner. He sends the materials as directed by B (individual trader) on freigh .....

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gistered under service tax) sends the materials,using consignment note to B, a central excise unit and the freight is paid by C, the seller who is an individual. The freight amount is ₹ 30,000/-Thanks in advanceAny service tax liability? if so, on whom. - Reply By SAKTHIVEL PONNUSWAMY - The Reply = Dear Sir, Please see my suggested reply for your queries Mr A is an individual lorry owner. He sends the materials as directed by B (individual trader) on freight paid basis, using consignment n .....

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nsport agency.Transporter is liable to pay service tax since freight is paid by a person other than the person mentioned under reverse charge mechanism. Mr A is a proprietor sends the materials using his own lorry on freight paid basis to Mr B another individual trader. The freight amount is ₹ 40,000/- Freight paid basis means freight paid by consignor. In this case lorry is owned by consignor, he cannot pay freight for himself. Probably it may be on freight To Pay basis. In this case Mr. .....

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