kindly advise

Queries 700 views 4 replies

Abansal

Manager

121 Points Posted on 15 December 2009

we are a manufacturing company who takes the services of transport operator to deliver the goods of sale to final customers.

we are collecting the freight amount from customer by issuing them debit note apart from sales invoice.transporter is issuing us his invoice and we are finally paying the transporter.

now as per service tax act , who is liable to pay service tax amount.?

till now we were paying the service tax amount, now one of our customers wants that let him pay the freight amount to us BUT service tax amount he wants to pay

since the final liability is devolved on us, can we allow our customer to finally pay service tax of GTA?

Replies (4)

CA NEHA AGARWAL

Practise

227 Points Posted on 15 December 2009

yes u can allow the customer to pay service tax there is no obligation in it

but your sales invoice should clearly says that customer is paying the service tax as ultimately u r paying the freight to the transporter

Madhukar N Hiregange

Chartered Accountant

39039 Points Posted on 15 December 2009

The service tax liability is on the person responsible for paying the freight. In this case you can say you are his agent.

The problems in future could be that the dept may say they do not know whether he has paid or not and therefore ideally he should pay the frewight himslef and pay the ST on the freight himself.