How to calculate Service Tax on lorry freight above rs750/-

This query is : Resolved 

05 August 2008

Dear Sir,
I'm working in a Trading Concern regd with Central Excise.
We are liable to pay lorry freight.
Hence it attracts Service Tax.Pls kindly let us know under what type of business we shud register withService Tax.what is the rate of service tax we have to pay & how it is calculated.
Experts on Service tax may please answer this query.
with best regards

CA. Harinder Kumar (Expert)
05 August 2008

Every goods transport agency which books the goods for transportation by road nad issue a consignment note shall be liable to pay service tax and shall be treated as an assessee for service tax purpose. In organised sector consignor or consignee who pays the freigt shall be the person liable to pay service tax.
Notification no. 35/2004 st 3/12/2004 is to include in person liable in case of goods booking agencies following person as consignor ot consignee
* a factory, company, corporation, regd. society, cooperative society, regd. dealer of exciseable goods, body corporation, partnership firm

as in your case you are a regd. dealer so if you are paying freight above Rs. 1500 per goods carriage or Rs. 750 per individual consignment. you are liable to pay service tax.

You have to register with central excise dept. under GTA services

Tax rate is basic 12%, EC 2%, SHEC 1%
It comes around 12.36%

but you will get 75% abatement on gross freight paid

for example if you paid freight of Rs. 1000.00 then service tax will be calculated as follows:

Freight paid 1000.00
- 75% abatement 750.00
balance charagable 250.00
S Tax payable @ 12.36% 31.00

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