Registration of service tax of transport operator /agency

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KVS Rao

CFO

25 Points Posted on 21 September 2011

Deal Collegues,

I would like to have clarity on Service Tax on transport contracts on the following points.

1. The Contractor has entered into a contract for unloading coal from railway siding and deliver by Road Transportaion of the coal at the customer factory. Is Transport contactor liable to pay service Tax or the the company receiving the service, has to pay service Tax?

2. The customer has sub-contracted the same to another transport contractor. In such a case the sub contactor has to pay service Tax ot the contractor has to pay the service Tax?,( keeping in view the receiver of service has to pay service tax)

3. For Transportation of goods there is abattement of of 75% of the value. Hence Service Tax is to be paid only on 25% of the value @ 10.3% .is it correct?.

An early sharing of openion is appreciated.

Thanks,

KVS Rao

Replies (2)

Ram Avtar Singh

Nagari Sultanpur U.P.Delhi

12314 Points Posted on 21 September 2011

if transporter issue service tax Bill then transporter will deposit service tax to govt. other wise company booking cartage and will pay service tax. In this case transporter to be mentioned in his Bill service tax to be paid by consignee.

CA Unnikrishnan Nair N

Chartered Accountant

2114 Points Posted on 21 September 2011

Assume that the loading/unloading and transportation are composite contracts and these are not charged separately. Otherwise, loading/unlaoding may be taxable under cargo handling. GTA is under reverse taxing and the payer of freight is liable to tax. User company is liable to tax as it pays freight to transportator. In case of sub-contracting , the main contrator may also be liable to tax as he pays only a lower sum to the sub-contractor.