GTA Service tax libilities on payment as pure age

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kamal (Querist)
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20 November 2009 Dear Sir,

We are paying Transportation Charges on behalf of our customer. Transporator rasing bills on CHA name and CHA rasing bills to customer after charging service tax on GTA service.

Now some of our clients told that Custom House Agents are not liabile to pay service tax on behalf of their customer. if CHA pay than they are not eligable for CENVAT CREDIT on GTA.

Now what procedure we can follow that we can raise Debit note without service tax to Customer for amount paid to Transporter on behalf of Customer

Thanks & Regards

Kamal

Sunil

Sunil (Expert)
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20 November 2009 If consignor or consignee is one of the specified entities, the person responsible for paying freight is liable to pay the service tax.

In your case, your exporter is consignor and the GR is issued with you as consignee receiving the goods at the point of shipment. Whoever is responsible for paying the freight is liable for discharging the service tax liability if either one of you is one of the specified entities.

If you are pure agent, the bill should be in name of your exporter. Then he should discharge the liability. Here this is billed to you in your name and you are paying the transporter and recovering from the exporter. Therefore you will discharge the service tax liability and recover from the exporter the freight payment and the service tax.

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