06 December 2010
COMPANY IS AN IMPORTER AND HAS BRANCHES IN INDIA. THE COMPANY IS SENDING COURIERS TO ITS BRANCHES BY SAFEXPRESS(TRANSPORTER). AND SAFEXPRESS IS CHARGING SERVICE TAX.
IN THIS CASE WHO NEEDS TO PAY OR CHARGE SERVICE TAX ??
08 December 2010
COMPANY IS AN IMPORTER AND HAS BRANCHES IN INDIA. THE COMPANY IS SENDING COURIERS TO ITS BRANCHES BY SAFEXPRESS(TRANSPORTER). AND SAFEXPRESS IS CHARGING SERVICE TAX.
The liability for payment of service tax is always with the recipient. The service provider is charged with collecting and remitting the same to the Central Excise Authorities.
Transportation of goods can be by any of the following means: (a) Courier Service Agency; (b) Transport of Goods by Air Services; (c) Transport of Goods through Inland Water Services; (d) Transport of Goods by Rail Services; (e) Transport of Goods by Pipeline or Other Conduit Services; (f) Goods Transport Agency.
Circular No. 104/07/2008 - ST dated 06-08-2008 clarifies that when time sensitive transportation of goods is treated as Goods Transport Agency Services and not Courier Agency Services so long as the entire transportation of goods is by road and the person transporting the goods issues a consignment note with the prescribed details.
CBEC Master Circular No. 96/7/2007 - ST dated 23-08-2007 clarifies where door to door transportation of goods and articles with special arrangements for speedy transportation and timely delivery are made, such services known as "Express Cargo Service" are covered under Courier Agency Services.
Section 66A transfers the liability for collection and payment of service tax on the service recipient only in case of Goods Transport Agency Service and in case of other services on the importer only if the service provider has no representative in India or is not liable to pay service tax in India.
In the circumstances, M/S Safexpress being a person rendering "Courier Agency Services", it is they who are liable to collect the service tax from the importer and remit it to the authorities.
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