Service tax on carriage outward
This query is : Resolved
17 January 2013
If I am paying carriage o/w to individual transporter (and not a GTA) on behalf of my customer, do I need to pay service tax on that carriage o/w on reverse charge basis even if I am acting as his(customer's) agent?
17 January 2013
Only the person liable to pay the freight is liable to pay. If you are merely an agent you need to intimate him that you are not paying so that there is no lapse on his part which causes an enquiry for you.
17 January 2013
O.K. And if I have already paid service tax on such carriage o/w, can I claim its credit or take refund?
25 January 2013
O.K. And if I have already paid service tax on such carriage o/w, can I claim its credit or take refund?
24 July 2025
Here's a clear answer for your query on **service tax on carriage outward paid to individual transporter (not GTA)**:
---
### 1. **Do you need to pay service tax on reverse charge basis if you pay carriage outward on behalf of your customer?**
* If you are **only acting as an agent for your customer** and the **customer is liable to pay the freight**, then **you as an agent are not liable to pay service tax on reverse charge basis**.
* The liability to pay service tax on carriage outward (if applicable) lies with the **person liable to pay the freight**.
* So, you should inform your customer clearly that you are paying on their behalf and they are responsible for paying any service tax.
* This prevents confusion and possible scrutiny by tax authorities.
---
### 2. **If you have already paid service tax on such carriage outward, can you claim credit or refund?**
* Since the **liability to pay service tax lies with the actual freight payer (customer)** and you paid it as an agent, you are technically **not the service recipient or service provider** in this context.
* Hence, **you cannot claim CENVAT credit or refund on service tax paid mistakenly on carriage outward** paid on behalf of your customer.
* You should clarify this with your customer and ensure future payments are properly accounted for to avoid such situations.
---
### Summary:
| Situation | Liability on Service Tax | Credit/Refund Eligibility |
| -------------------------------- | ------------------------------------------------ | -------------------------------------------------------------------- |
| Paying carriage outward as agent | No service tax liability on you; customer liable | No credit or refund on service tax paid by you on behalf of customer |
---
If you want, I can help draft a letter or notification to your customer to clarify the tax liability. Would that be useful?
---
### 1. **Do you need to pay service tax on reverse charge basis if you pay carriage outward on behalf of your customer?**
* If you are **only acting as an agent for your customer** and the **customer is liable to pay the freight**, then **you as an agent are not liable to pay service tax on reverse charge basis**.
* The liability to pay service tax on carriage outward (if applicable) lies with the **person liable to pay the freight**.
* So, you should inform your customer clearly that you are paying on their behalf and they are responsible for paying any service tax.
* This prevents confusion and possible scrutiny by tax authorities.
---
### 2. **If you have already paid service tax on such carriage outward, can you claim credit or refund?**
* Since the **liability to pay service tax lies with the actual freight payer (customer)** and you paid it as an agent, you are technically **not the service recipient or service provider** in this context.
* Hence, **you cannot claim CENVAT credit or refund on service tax paid mistakenly on carriage outward** paid on behalf of your customer.
* You should clarify this with your customer and ensure future payments are properly accounted for to avoid such situations.
---
### Summary:
| Situation | Liability on Service Tax | Credit/Refund Eligibility |
| -------------------------------- | ------------------------------------------------ | -------------------------------------------------------------------- |
| Paying carriage outward as agent | No service tax liability on you; customer liable | No credit or refund on service tax paid by you on behalf of customer |
---
If you want, I can help draft a letter or notification to your customer to clarify the tax liability. Would that be useful?
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