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Service tax on freight in bill
One of our vendors from Chennai has charged full service tax ( @ 14%++) on freight in bill. Whether we as purchaser of goods are liable to pay service tax charged on freight by vendor. As per vendor, the work of transporting goods or transportation is carried by their other company specifically formed for the purpose of transportation. In this regard, kindly note, right now, we are making payment to vendor only for transportation and not for service tax and vendor have not issued any consignment note also.
You are requested to kindly advice.
Replies (2)
You have to pay service tax only 4.5% of freight. because there are 70% abatement allowed from service tax to transporter. Ex. If freight amount is rs. 1000- then you will pay only rs. 45 as service tax.
But that is applicable to GTA who issues consignment note, wherein in my case, they have not issued any consignment note and have charged full service tax as already mentioned in my query.
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