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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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In view of this rule, the consignor or consignee i.e. importer or exporter is a person liable to pay freight and they pays it through their agent Pvt Ltd. co. Hence, the export and importer on whose behalf the Pvt Ltd Co is arranging the transport vehicle and paying freight charges are supposed to pay service tax. But contrary situation is that as the consignment note is in the name of Pvt Ltd Co. and the company is paying freight charges it may be treated as the consignor and it may be made lia .....

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endors provided the consignment note is issued in the name of Pvt Ltd company and payment of freight is made by it. If it can be established that the payment has been made by Pvt Ltd company as agent of exporter/importer, liability under RCM would be on such party. The nature of services provided by pvt ltd company to exporter/importer needs to be examined to determine the liability. If the services provided is in the nature of cargo handling/freight forwarding (i.e. responsibility of Pvt Ltd co .....

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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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h. Ganeshan Kalyani s replies dated 16.11.2015 and dated 18.11.15 and Sh.Ashish Chaudhary s reply dated 17.11.15.I would like to express my views only on the issue of Consignment Note in this context.The judgement in the case of KMB Granites reported as 2014(35) STR 63 (Mad.)= 2014 (11) TMI 87 - Madras High Court pertains to the period from January, 2005 to June,2005 and the person who has sought for reply is concerned about the present position. And if we talk of period prior to 1.7.2012, issua .....

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not absolve the assessee of service tax liability. I mean to say contents of the definition do not lose its applicability even in the present scenario. Normally there are following ingredients to qualify for the taxable service and these are :- There must be Service Provider (Service Receiver in the case of RCM) There must be Service Receiver. Actually service should be provided Consideration billed/received. Service. does not fall in the category of negative list. Service Does not fall in the .....

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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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For goods transport agency service the recipient of the service and more specifically the person who pays the freight is liable to pay service tax. The service of GTA availed by your client company may have been availed for their customers but facts remains intact that the service is availed by your client company and have paid the freight to the goods transport agency - Reply By Ganeshan Kalyani - The Reply = Further I fully agree with Kasturi sir reply. And as said it is better to pay service .....

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is bundled services of freight forwarding, liable to service tax at full rate. Transporters charges could be exempted for all the parties subject to fulfilment of condition of Notification No. 31/2012-ST - Reply By Ganeshan Kalyani - The Reply = Thank you Kasturi sir. - Reply By SANDEEP GUPTA - The Reply = Thanks to all sir(s),I we assume that our client company is also a GTA (In spite off no issuing own consignment note). Then also service tax is to be paid by customers.In this situation our c .....

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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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it tentamounts to a reimbursement transaction and not a GTA service and as such your client company will not be treated as GTA. further service tax is applicable on reimbursement transaction w.e.f.14.05.2015 as per amendment in Finance act 2015. Moreover a margin element is also added which gives weightage for taxability. - Reply By Radha Arun - The Reply = The person liable to pay service tax in respect of GTA is any person who pays or is liable to pay freight either himself or through his age .....

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. Now please tell me the applicable rate and relevant account head. - Reply By Ganeshan Kalyani - The Reply = The Service tax on reimbursement shall attract the accounting code of the service toward which the the expense is incurred on behalf of the recipient of the service. This is second thing. First being the liability of service tax to be paid by your client company under reverse charge on the freight charge paid based on the consignment note it received from GTa. - Reply By Ganeshan Kalyani .....

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