Who will bare service tax liability?

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This query is : Resolved

Umaanshu (Querist)

18 October 2010 Dear,
I am going show here a specimen of an invoice
you have to give me answer of my all questions.

Sales 400000

Vat 4% 16000

Total 416000

freight paid on
your behalf 15000
----------
Gross total 431000

1)My question is whether this presentation of invoice is correct or not.

2) I am paying freight on behalf of party,

who will pay the service tax liability.

3)According to business audit, am i doing something wrong?

4) Should i charge vat on freight? if yes then where it is written in law.

5) if transportor and the consignee don't pay service tax, shall i have to pay service tax at the end?

Kindly answer of my all questions.

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)

19 October 2010 Whereever freight is charged on invoice , VAT will alos be payable on freight amount.

Service tax will be payable by you , when you are making the payment to transporter. So it will be better to calim total amount i.e. transport charges plus service tax from transporter.

Service tax will be 10.3% on 25% value of transport charges.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

19 October 2010 The consignee/ consignor responsible for paying the freight is liable to pay the ST. You may ensure that the transporters invoice is for the same amount i.e.15k and pass the saem onto the cusotmer for his ST payment. If he does not pay then it is his problem.

Freight is normally deductible under VAT but not under CST. [ you need to verify this in your local law]

Your invoice appears to be correct. Confimr in your local VAT law that freight is deductible.