service tax on freight collected on transport of goods

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 April 2015
Sir

We are manufacture of goods heavy machinery and plant , where we have to collect freight on say 1% of the value of the plant if the value of plant is 25,00,000/-
25000/- from the customer and we actually pay Rs 18000/- to the transporter and paid the tax under GTA on 18000/- under reverse charge system,
Now my doubt is what about 25000/- collected as transportation charges collected from the customer is it taxable under transportation charges GTA( TRANSPORT OF GOODS) as we are providing other services like erection commissioning charges from the customer and paying tax on the same
or we have to pay tax on 7000/- ( 25000-18000) as business support service or business aux services

your early reply will be highly apprecated

thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

24 April 2015 You have to pay service tax on 7000/- as business support or business aux service.

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