Freight

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 October 2012 A company has incurred expenses and made payment for both freight inward and freight outward.
In case of freight inward it has paid service tax under reverse charge mechanism.
My question is whether the service tax would also to be paid in case of freight paid to transporter and billed in invoice raised to customers and ultimately recovered from customers.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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13 October 2012 Service tax will have to be paid on freight outward also. The fact that you have recovered the same from the customer does not absolve the company of its liability to pay service tax.

In this case, you can ask the transporter to raise a bill directly on the customer.

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