service tax on hire charges paid to truck owners

This query is : Resolved 

19 November 2008

a 100% exporting company purchases some of its raw materials ie fish from andhra pradesh and transoprts it to kerala.

the company has an agent in andhra who does the purchases and loads the goods in the truck.

the truck is sent by the company from kerala. this truck is hired from its owner and no goods transport agency is involved.

The truck owner is paid his charges ie freight when the goods are brought by the truck in the factory in kerala.

is the compny liable to service tax in respect of this transaction?

Ravikumar.G (Expert)
19 November 2008

As per rule 2(1)(d)(v) of Service Tax Rules, Consignor or consignee who is paying freight will be liable to pay service tax, if consignor or consignee is any one of the following -
(a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948).
(b) any company formed or registered under the Companies Act, 1956 (1 of 1956).
(c) any corporation established by or under any law.
(d) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India.
(e) any co-operative society established by or under any law.
(f) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder.
(g) any body corporate established, or a partnership firm registered, by or under any law.

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