My company is engaged in selling of medical products to various distributors across India.The agreement with the dealers in FOB (Freight on Board). However my company facilites the movement of goods through courrier and air cargo only and recover freight on estimate basis which is slightly higher than what we pay to Bluedart.
Am I suppose to charge Service tax on the freight recovery (which is normally higher than what I have paid) to BlueDart
Debate Over Service Tax on Freight Recovery: Is the Company Liable as a Goods Transport Agency? A company selling medical products in India inquires about the applicability of service tax on freight recovery, which is higher than the actual freight paid to BlueDart. Responses vary: one suggests liability for service tax on freight, while another argues that the company is not a Goods Transport Agency (GTA) and thus not liable. Another opinion highlights that excess freight recovered could be subject to service tax as profit. It is also noted that service tax liability may not apply under reverse charge for services provided by registered companies like BlueDart or air cargo providers. (AI Summary)
TaxTMI 
TaxTMI 
