Need advice about service tax

228 views 1 replies
one of my client is dealing in coke.. he entered in to agreement with party to supply coal @ 3800 rs MT... this 3800 includes everything like...transportation...vat...tcs everything... now my question is that suppose my client is paying 650 MT for transportation to transporter ...and if my client separately charged Rs 650 from client as transportation charges and (3800-650) 3150 charged for goods.... so here he can take advantage of Pure agent...??? as he charging the same amount of transportation...???? and whether he have to pay service tax on amount of transportation..???/
Replies (1)

Sir,

If you undertake to reimburse the transport cost you would be covered under service tax  as of now reimbursement of any amount for taxable service is covered under the definition of service.whether you reimburse on cost to cost basis or with a markup.

Even if you bill him seperately you would be liable to pay service tax for the simple reason it is a provision of service which is taxable.

A pure agent is one who act on behalf of the buyer or seller , where he has no lien over the goods or services and undertakes to perform a service for a commission.so you will not be considered as a pure agent since you are the service provider .

A better proportion is to  bill the customer directly for transport by your transporter ( in this case RMC applies and the liability  to pay service tax is shifted to the custormer ) and you shall bill him for the cost of coke.

 


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