One of my clients (un-registered partnership firm) is mainly a trader. He pays for the freight which is included in the sale price, as the sale would be on FOB basis. And sometimes, he is asked by his customers to arrange for transportation.
My query in both the situations, will he be considered as a GTA for the purpose of paying Service Tax on Freight?
No. he is not the GTA, he is the supplier. The entity which transports the goods for him is the GTA or GTO [ operator.
In first place your client is not a GTA as he is not providing the transport services.Now the question is whether he is liable to to pay Service Tax or not.As per reverse charge mechanism if your client is receiving services of any GTA for trnsportation of the goods he is dealing with,he is liable to pay 100% service Tax when he is paying the frieght.But in second instance when he is not paying the frieght he does not liable to pay Servie Tax.[Notification No.30/2012-S.T dated20.6.2012]
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