service tax on gta

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CA Vijay Agrawal (Querist)
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01 February 2009 my client is a factory and has entered into agreement with some agencies to process goods and transport the finished goods to agency. the transportation charges for this both inward and outward are paid by factory but reimbursed by agency after completion. who is liable for service tax on gta whether factory or agency?
supportive legal provision is appreciated

Rajesh Kumar

Rajesh Kumar (Expert)
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02 February 2009 Whoever is paying the freight is required to pay the service tax on freight. The service tax is incidental to the freight charges.
Off course, the factory can take reimbursement of freight from the agency, including Service Tax paid.

CA Vijay Agrawal

CA Vijay Agrawal (Querist)
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02 February 2009 Sir,
The agency is not agree to reimburese the service tax to factory.In agreement they have clearly stated that all sorts of taxes shall be borne by factory.
further freight is shown as advance to agency by factory till reimbursement as it is not the transportation expenses of factory . kindly suggest in the matter with provision

CA Vijay Agrawal

CA Vijay Agrawal (Querist)
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02 February 2009 kindly suggest if there is any possible ways to save taxes from department by the factory?

CA Vijay Agrawal

CA Vijay Agrawal (Querist)
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02 February 2009 what about inward transportation of input goods into factory?

CA Vijay Agrawal

CA Vijay Agrawal (Querist)
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02 February 2009 yr suggestion at an early is my need of time

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