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Service Tax GTA

Bimal Thacker (Proprietor) (762 Points)

22 February 2011

A proprietor ship firm doing trading business from Home, Supplying goods to company and others, rate charged is FOR customer place i.e. freight is included in rate. Truck Freight is paid by proprietor to GTA. Who is liable to pay service tax? If proprietor is not liable to pay service tax any case reference?

Whether there will be any difference if proprietor pays freight to direct truck owners?

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4 Replies

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 22 February 2011

Since the consignee is company , the proprietor who pays freight is liable to tax. A few CESTAT decisions have been reported holding that freight paid ti individual truck owners are not taxable as they are not GTAs. Since department is still agitating the matter, planning on this line is not advisable.

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 22 February 2011

In my view in this case since the proprietor is paying the freight charges there wouldbe no liability on him. The GTA may have to pay in this case.

If the transportation is by a truck owner/ operator and not a booking agent then neiether has to pay as GTO is not liable for ST>

Alok Agarwal (Partners) (144 Points)
Replied 06 March 2011

The consignor (here proprietor) or the consignee (here the company) should be one of the specified person to pay the tax. Since the company falls in the category of specified persons, they have to pay the GTA, irrespective of whether the person paying the frieght is the proprietor.

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 06 March 2011

Originally posted by : Bimal Thacker
	A proprietor ship firm doing trading business from Home, Supplying goods to company and others, rate charged is FOR customer place i.e. freight is included in rate. Truck Freight is paid by proprietor to GTA. Who is liable to pay service tax? If proprietor is not liable to pay service tax any case reference? Whether there will be any difference if proprietor pays freight to direct truck owners?

as the porpietorship firm is payee, and if its registered under local VAT/CST/ companies act/ Excise or service tax, then the propietor is liable to pay service tax to transporter or to service tax department ( if not charged by the transporter)