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Applicability of service tax on transporation/ freight charges

Service Tax - Started By: - SANDEEP GUPTA - Dated:- 16-11-2015 Last Replied Date:- 28-11-2015 - Sir,One of my client (Pvt. Ltd. co) who is engaged In providing logistics service to exporter and importers as well. company arrange transport vehicle from the open market, and such agency issue consignment note/ bilty/ lorry slip in fevour of this logistic company. Such logistics company do not issue any consignment note but raise a slip for taking receipt of goods only. Will such services be taxable .....

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ble to pay service tax under reverse charge mechanism. This is my view. The views of expert is welcomed in this regard for more clarity. - Reply By SANDEEP GUPTA - The Reply = Thanks for opinion, please also give your opinion on first part (will such service could be taxed under any head our be claimed not taxable as per nagetive list.sandeep gupta - Reply By ashish chaudhary - The Reply = Pvt Ltd company would be liable to pay service tax on RCM on services availed from the transport vehicles v .....

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case, Basically pvt. ltd is providing bundle of services which broadly falls under transportation, CHA, warehousing etc. Company hire another agency(truck/shipping or airline) for transport and incur incurr some fee (like duty, octroi etc) as pure agent. Company does not raise won consignment note but issue a document for taking receipt thereon. Now I want to know whether amount charged as freight/transportation (with profit margin) be claimed as tax free vide entry (66D(p) negative list or not. .....

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nce of consignment note was one of the ingredients to qualify the definition of GTA Services under Section 65 (50b) of the Finance Act. Note the words in the definition, ..........................., by whatever name called. This definition remained in force from 18.4.2006 to 30.6.2012 and, thereafter, w.e.f. 1.7.2012 it is in force for statistical analysis. Change of nomenclature from 'Consignment Note' to another name of the document or non-fulfillment of one condition out of seven does .....

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before 1.7.2012 or after 1.7.2012. So practically better option for the assessee (Service Provider or Receiver) is to pay service service tax and avoid interest and penalty. - Reply By SANDEEP GUPTA - The Reply = Thanks sir,Please tell me if am wrong on the following stand,1) My client company is liable to pay service tax on GTA service under reverse charges irrespective of the fact goods is moving to or from custom station.2) He can take cenvat credit of such service tax deposited under rcm.3) .....

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tax and avoid interest and penalty. - Reply By KASTURI SETHI - The Reply = Today I opened the Discussion Forum of TMI for writing point-wise reply to the queries dated 19.11.2015 of Sh.Sandeep Gupta and found that Sh.Ganeshan Kalyani has already answered to the queries. I thought of writing on the same lines. Hence I endorse Sh.Ganeshan Kalyani's views on the three points displayed on 19.11.2015. - Reply By ashish chaudhary - The Reply = Dear Sandeep Ji, Services provided by pvt ltd company .....

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ity I am of the view that if you can prove to the department that there is justifiable nexus of input service of GTA for providing output bundled services to customers by your client company. this is my view. - Reply By Ganeshan Kalyani - The Reply = * Credit can be availed. to be read with my previous reply. Thanks. - Reply By SANDEEP GUPTA - The Reply = Sir, I ma very thankful to you for suggestion,But still am little confused and want more clarity on the following issues with regard to Transp .....

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nt , as per Rule 2(1)(d)(i)(B) of the Service Tax Rules 1994. Therefore, if the exporter / importer authorises the pvt ltd company to pay freight, and the consignment notes are obtained in the name of the exporter / importer, that person can avail Cenvat credit or exemption for exporter, as the case may be. - Reply By SANDEEP GUPTA - The Reply = Ganeshan Kalyani Sir,My client company charges the transportation charges with some margin (or agreed rate with customer) irrespective of actual payment .....

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By Ganeshan Kalyani - The Reply = Abatement on GTA service is 70%. The receiver of the service who pays freight should pay service tax on 30% of the freight amount under reverse charge. secondly the freight amount which would be recovered from their customer should have service tax charged@14.5% on the invoice raised on them. The service tax so collected shall be paid under same heading as that of GTA since it is reimbursement of the freight charges with some profit element. this is my view. - R .....

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