Service tax on transportation

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This query is : Resolved

Rajesh (Querist)
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04 September 2013 We are a trading co. supplying coal.

Transporter supplies coal to our buyers. But, transporter issue invoice to us and we than issue invoice to our buyers in our firm name.

Challan goes to buyer with our firm name.

My query is whether we have to pay service tax
1) if we issue invoice to our buyer with same amount which transporter charges to us and
2) if we issue invoice after adding some amount to which transporter charges to us.

This is our 1st year and we have not crossed 9 lacs limit.

Ganeshbabu K

Ganeshbabu K (Expert)
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04 September 2013 See person liable to pay frieght is considered as service receiver and he is liable to pay GTA service tax,,
.
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So if Customer is liable to pay frieght he is service receiver and he suppose to pay service tax on GTA..
.
here even though you paid frieght to GTA you have just paid on behalf of buyer but buyer is responsible to discharge GTA liability and you can collect amount paid to GTA on behalf of buyer by way of Debit Note
.
.

The small service provider exemption of ` 10 lakhs not available when tax is payable under reverse charge.
.

Rajesh

Rajesh (Querist)
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05 September 2013 Thank You for replying.

Sir, my query is GTA has issued INVOICE to us mentioning "Service Tax to be paid by consignee."

And than we have issued INVOICE by increasing the freight amount to our buyer mentioning "Service Tax to be paid by consignee."

So, we are not paying on behalf of our buyer but we are collecting some extra freight from buyer.

Some Tax experts are saying we are also liable to pay service tax.

So, still do you think we are not liable to pay Service Tax and only buyer will pay service tax?

Ganeshbabu K

Ganeshbabu K (Expert)
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05 September 2013 I do agree that service tax applicable on you in above case

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