There is a client registered for GTA service providing transportation service to a Cement plant (a company). The service tax on this service is paid by that company. The client is also engages the vehicles of others transporters inspite of its own vehicles for transportation of cement on a commission basis (calculated say Rs 10 per MT load) Now for the goods transported by its own vehicle the service tax liability will be nil (due to reverse charge) but for other vehicles whether the commission deducted by it will be liable for service tax ?
For example say total goods transported by the other transporters vehicle is 500 MT. total freight comes to @ 400 Per MT equels to Rs 200000 Rs. Ther service tax @ 12.36 % on it is paid duly by cement plant. Client deduct commission @ 10 Per MT i.e. Rs 5000 and paid balance amount of Rs 190000 to the other transporters. Now whether that 5000 Rs commission will be liable for service tax ? If yes than whether it will not be a double taxation ? Also please tell me whether the limit of Rs 1000000 will be considered for that commission amount ?
CAclubindia
