Reverse charge applicabilty

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lexbery

114 Points Posted on 11 January 2014

dear all,

i have a query of reverse charge applicibilty.

we know reverse charge on freight is applicable on all types of firm except sole proprietorship firm.

but i have read if the firm is registered in excise departmant then even sole proprietor has to pay on reverse charge on frieght.

but if the sole propeitorship firm is a trading firm(only buying and selling of chemicals) and not a manufacturer then is reverse charge on freight appplicable???

Replies (2)

Arun Kumar Singh

GST Advocate

13166 Points Posted on 11 January 2014

Proprietorship firm is also liable to pay service tax on goods transport agency if who is registered under the central excise act, 1944 (1 of 1944) as a dealer.

Manoj Agarwal

Service Tax Consultant Rourkela Service

2755 Points Posted on 14 January 2014

Reverse Charge on Freight paid to GTA:

1. If Proprietorship firm doing trading of goods and not registered as Dealer under Central Excise, then no reverse charge.

2. If Proprietorship firm doing trading of goods and registered as Dealer under Central Excise, then reverse charge applicable and propriotor has to pay service tax @ 3.09%

3. If proproetorship firm doing manufacturing and not registered or governed under Factory Act, 1938, then no reverse charge.

4. If proproetorship firm doing manufacturing and registered or governed under Factory Act, 1938, then reverse charge applicable.