Under reverse charge mechanism, the service tax will have to be discharged by the person who pays freight amount if he falls under the following category. a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948); b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India; c) any co-operative society established by or under any law; d) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made there under; e) any body corporate established, by or under any law; or f) any partnership firm whether registered or not under any law including association of persons;
so, both inward and outward freight is included.
Regarding Cenvat credit, inward is eligible but outward is eligible on certain condition.
Service tax is 12.36% and payable on 25% of the freight amount after availing 75% abatement.
No service tax is payable for the freight amount of rs.1500/- for single consignment and Rs.750/- for multiple consignment. For product wise exemption kindly refer the exemption notification.
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