Service tax liability in case of gta service

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Hi...

A partnership firm (XYZ co.) registered as dealer (FSD/SSD) engaged in business of trading in Iron Ore Fines. It receives transportation service from various transport companies to transport the fines from the supplier(say A Ltd.) to the customer of the firm( say B Ltd.) directly and the transporter raise the transportation bill in the name of the firm (XYZ co) indicating therein that service tax liability will be on the consignee of the goods. The query is that who would be liable to pay service tax, firm(XYZ co.)or the customer of the firm (B Ltd.).

If the answer to the question is XYZ co. ,is it possible for the firm to shift the ST liability to its customer (B Ltd.) as XYZ co. is a dealer.

Replies (1)

If the person liable to pay freight to GTA is in specified category then reverse charge would apply and service tax would be paid by person paying the freight. In the instant case partnership firm being in the specifed category makes payment to GTA and hence service tax liability is on XYZ.

The liability can be shifted to B if B directly makes payment to the GTA.

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