A company gets transportation services from a small transporter,whose annual revenue is less than Rs. 8 lacs ( Exempted from Service Tax).Is company liable to deposite Service tax on the amount of Freight paid by it. If company is exemped to deposit service tax by virtue of the exemption of the transporter,than what document the company should have from the transporter to avail the exemption.
CA. Arun K. Aggarwal
Under Rule 2(1) (D) THE LIABILITY TO pay service tax on Freight has been shifted to the consignee i.e.PERSON LIABLE FOR PAYINGERVICE TAX in certain specified cases.Since a Company is covered under this rule the liability tp pay service tax on Freight rests upon your company under this REVERSE CHARGE METHOD. The threshold limit applies to Service Provider only . Here you are not a service Provider you cannot avail the exemption.
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