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service tax on carriage inward

Suman (JOB) (43 Points)

13 May 2008

hello everybody,

Please clarify me about service tax applicable in carriage inward.

Is an assesse is liable to pay 100% of service tax or is there any abatment as in the case of carriage outward.

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9 Replies

CA Hemant T Dewani (Chartered Accountant) (3356 Points)
Replied 13 May 2008

what is carriage inward if it transportation & assessee is any six under the service tax act then it is liable to service tax act & 75% abatement is available to the assessee & service tax is paid on balance amount no cenvat credit is availabe to you

Dilip Darji (392 Points)
Replied 13 May 2008

Dear Sir.

Service Tax on Transport of goods is payable by the Service availer and not the service provider. As per Noti.No.1/2006-ST dt.01/03/06, abatement to the extent of 75 % of Gross amount is admissible. Meaning thereby that on 25 % of the amount charged by the Transporter, Service Tax @ 12.36 % is payable.

Manufacturer/Taxable Serrvice Provider can avauil credit of Service Tax paid on inward freight. CENVAT credit is not available on outward freight.

(Guest)

Respected Sir/Madam,

In Service Tax concept what is meaning of "abatement" and also what is exemption ?

Please reply

cashekar (Chartered Accountant) (133 Points)
Replied 10 June 2008

hello everybody,

Please clarify me about service tax applicable in carriage inward.

Is an assesse is liable to pay 100% of service tax or is there any abatment as in the case of carriage outward.

The Answer being :

The assessee has to pay service tax at 12.36% on 25% of the total value of Freight Inwards. Here there is an assumption that the exemption with regard to small service providers is available but it is not so. Even if the freight is 100 Rs, also the service provider has to remit the service tax on value after abatement that is Rs 25 @ 12.36%. If ther service provider is not liable to under service tax is also to register with the service tax authorities.

CA PRAMOD SARAOGI (Chartered Accountant) (1113 Points)
Replied 29 June 2008

In a layman's language there are three types of benefits available underservice tax. 1. Non-Taxability - means the service is not taxable at all....i.e. it doesnt fall under the perview of service Tax. 2. Exemption - The service fall under the perview of Service Tax but exempted from Taxability either partly or fully (conditiobally or unconditionally) 3. Abatement : the service is Taxable but rebate can be claimed from the Tax upon fulfillment of certain conditions.

(Guest)

Sir,

Please advise me whether their can be any tax planning in respect of service tax charged on freight inward. Its a sole poprietorship firm. Whether it can be saved in any other form of organisation.

Please provide me the answer on my email address i.e munishagg_srcc @ rediffmail.com . I shall be highly obliged.