Transportation charges

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 February 2015 During the year co A has sold goods to Co B. Co A incurres some transportation expnse. Co A also raised debit note for the transportation expense on lumpsum basis.

Now my question is whether service tax is applicable or not.

CA Sandeep Kumar

CA Sandeep Kumar (Expert)
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13 February 2015 As per Rule 2(1)(d)of Finance Act, 1994, Service tax on freight should be paid by the person who will pay the freight. In this case Co A pays the transportation exp, he will be liable to pay service tax under reverse charge.

Querist : Anonymous

Querist : Anonymous (Querist)

14 February 2015 But Whether Co A is liable to charge service tax on the Debit note raised to co B which is higher than the actual transport bill.

CA Sandeep Kumar

CA Sandeep Kumar (Expert)
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14 February 2015 Yes can charge.

Querist : Anonymous

Querist : Anonymous (Querist)

15 February 2015 Should charge or can charge... as Co A has not charge it now the amt of debit note has cross 10 lac.

CA Sandeep Kumar

CA Sandeep Kumar (Expert)
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15 February 2015 If depends on the terms of contract. Otherwise it vl be the cost for Co. A.