Liability to pay service tax in case of transportation

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This query is : Resolved

Shivar (Querist)

18 January 2008 If a bill has has been raised for freight charges mentioning that the service tax has to be paid by the consignee and the consignee is not registered under the service tax what steps need to be taken?
Is it that a revised invoice has be raised charging the srvice tax?

Shivar

Shivar (Querist)

18 January 2008 please throw light on this.

Dayal

Dayal (Expert)

21 January 2008 The consignee will need to register under the service tax and pay service tax on 25% of the freight amount

The rule provides for payment either by consignor and consignee, but if the invoice specificaly states that consignee has to be pay then no choice.

If the consignee is a company then no choice it has to pay, but if the consignee is an individual then the invoice can be changed by informing the transporter, then he has to charge the consignee and pay the same to the govt.

jegannath G

jegannath G (Expert)

12 February 2008 It is the obligation of the consignee to pay the service tax on transportation charges charged to the consignee. hence the consignee needs to be registered under the Service tax rules & he can claim the exemption of 75% & needs to pay 25% on the service tax payable on the transportation cost.