Taxability of freight income

This query is : Resolved

Gaurav Mahajan (Querist)
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07 January 2008 X Ltd is in the business of selling & erecting towers for its telecome customers.This Co. Purchase towers from A. Ltd which delivered the towers at the site as per customer's (telecome co.) choice. A. Ltd is charging Freight from X Ltd. including the Am. of Service tax on transport.

X Ltd is charging its customer, Freight with certain amount of margin .

Will that margin is taxable under service tax as business support services or by any other means ?

Plz mention the relevant section/circular.

annapurna

annapurna (Expert)
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08 January 2008 When X ltd is charging the customer with frieght adding certian margin on that , it shall be liable to VAT. The freight collected from the customer should match with the frieght paid to the transporter. As per my view it shall be liable to VAT and not as business support service

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