Freight Amount charged by Supplier in Invoice.

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This query is : Resolved

Piyush Jain (Querist)

29 May 2009 We are a manufacturing concern, and we receive supply from different vendors.

Some vendors charged freight amount on the invoice raised by them.

Query: Is TDS applicable on the freight amount charged by the supplier on the Invoice shown separately? As we are paying to supplier and not to transporter, the supplier may be deducting TDS when paying to transporter.

Is Service Tax applicable on the freight amount and who is liable to pay service tax as we do not pay freight directly to transporter.

Kedar Pande

Kedar Pande (Expert)

29 May 2009 You are paying directly to Vendor, and as per income tax provisions on TDS, Tax is to be deducted on gross amount. So you will deduct the tax on freight also.

Service Tax Liability lies with vendor as he is taking the input credit.

SANDEEP AGGARWAL

SANDEEP AGGARWAL (Expert)

29 May 2009 When actual freight paid by vendor is reimbursed to vendor, then service tax or TDS proviso did not apply on you. Obviously Vendor will take care at the time of payment to transporter. But where vendor himself is transporter then he will charge service tax on tpt portion and you have to deduct TDS on transportation charges @2%+ SC+EC.

Regards,

Sandeep Aggarwal

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