Frieght o/w & service tax

i need some clarification on similiar query. If we are sending goods to client by transport, service tax at first step is collected by transporter. client receives goods on thier behalf and pay the amount of l.r..
As per commitment with client, the freight charges paid by the client would be reimburessed to client at the EOY if he settles his o/s account balance within stipulated time span.

In this scenario, if vendor reimburse Freight, is he liable to pay service tax , if so , in what time span ...

what would be the accounting entry for the same

Replies (5)

vendor reimburse frieght, the adjustment entry only to be made. Debit net freight expenses credit client a/c

So pls clarify that we need not to consider anything for service tax.

Thanks and regards

Yes. no need to consider service tax since it was already paid by the party.

Service tax is not relevant in this case.

Logistic company (trnasporter) billed for the freight charges inclusive of Service Tax. The total amount has been paid by the client (including service tax) on your behalf (meaning this is your expenses, which was paid by the client and subsequently reimbursed by the client at the year end from you). The service tax charged by the logistic company can be treated as input service tax at your hand, which can be utilised against the service tax liability, if you have anything.

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