Service tax on transport reimbursement
This query is : Resolved
13 April 2012
Suppose company A is reimbursing transport charges to supplier for supply of goods separately and supplier pays to the transporter.
My query is, liability to pay service tax against GTA is of supplier(supplier is individual) or company A ?
My query is, liability to pay service tax against GTA is of supplier(supplier is individual) or company A ?
13 April 2012
In this case ultimatelyu frieght is paid and borne by Company A. therefore, liability to pay service tax is that of Company A. Also since Supplier is individual he is not liable.
13 April 2012
YES....
GTA,SERVICE TAX PAID BY COMPANY
GTA,SERVICE TAX PAID BY COMPANY
13 April 2012
Sir in my case Transporter raise bill on supplier and supplier raise bill for transport on company by his name then also company will be liable
24 July 2025
Exactly! Here’s the clarity on your scenario:
* The **transporter** (GTA) raises a bill to the **supplier** (who is an individual).
* The **supplier** then raises a bill to **Company A** for reimbursement of transport charges.
* Since the **supplier is an individual and not registered under service tax**, he is **not liable to pay service tax** on the freight.
* **Company A**, being the ultimate service recipient and paying for the freight (reimbursing supplier), is **liable to pay service tax under Reverse Charge Mechanism (RCM)** on the transport service.
* So, **Company A must pay service tax on the freight amount** irrespective of supplier’s billing arrangement.
This is as per Service Tax law on GTA services under RCM, where service tax liability falls on the recipient (Company A), if the transporter or supplier is unregistered.
---
**Summary:**
| Party | Liability for Service Tax on GTA freight |
| --------------------- | ---------------------------------------------- |
| Transporter (GTA) | Pays service tax if registered |
| Supplier (Individual) | Not liable if unregistered |
| Company A (Recipient) | Liable to pay service tax under RCM on freight |
Let me know if you want the exact notification/circular references or calculations!
* The **transporter** (GTA) raises a bill to the **supplier** (who is an individual).
* The **supplier** then raises a bill to **Company A** for reimbursement of transport charges.
* Since the **supplier is an individual and not registered under service tax**, he is **not liable to pay service tax** on the freight.
* **Company A**, being the ultimate service recipient and paying for the freight (reimbursing supplier), is **liable to pay service tax under Reverse Charge Mechanism (RCM)** on the transport service.
* So, **Company A must pay service tax on the freight amount** irrespective of supplier’s billing arrangement.
This is as per Service Tax law on GTA services under RCM, where service tax liability falls on the recipient (Company A), if the transporter or supplier is unregistered.
---
**Summary:**
| Party | Liability for Service Tax on GTA freight |
| --------------------- | ---------------------------------------------- |
| Transporter (GTA) | Pays service tax if registered |
| Supplier (Individual) | Not liable if unregistered |
| Company A (Recipient) | Liable to pay service tax under RCM on freight |
Let me know if you want the exact notification/circular references or calculations!
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