M/s. XYZ , a logistics partnership firm, transports goods for Y Co. Ltd. The freight charges received by XYZ is after deduction of service tax by Y Co. LTD.
If XYZ Co. uses the trucks of third parties and makes payment for the usage of third party trucks (herein by called as attached trucks) should the firm pay service tax on the freight charges paid for the attached trucks?
Hi Lakshmi,
Under negative list regime the only requirment to charge service tax is that the activity involved such fall within the definition of service and not covered exempt service/ negative list.
The task of providing trucks to M/s XYZ is an activity and such activity is under taken for some consideration,therefore it satisfy the denition of service as given finance act 1994.
Therefore it is liable to service tax
Saini Pati Shah & Co LLP, Chartered Accountants
Mumbai
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