Service Tax on Freight Invoice raised by supplier

[ANIL MANTRI]

A company say Ajit Ltd sells us material, and transfers goods through gta Yash Transport. Yash Transport issues consignment note in which we are consignee, and in amount column it is written as to be billed. Ajit Ltd sends a freight invoice of Ajit Ltd.(Dumper Division) for the freight charges separately and mention in the invoice as service tax payable by consignee.They want us to issue cheque in the name of Ajit Ltd.(Dumper Division).  Are we liable to pay the service tax as we are paying it to X(Dumper Div.)and not Yash Transport.Request you to please explain.

[SHIVKUMAR SHARMA]

Mr. Anil

Incase of GTA service, Service tax is payable by the person who make the payment directly to the Transporter agst.Lorry receipt & Bill  issued in your name.if you are reimbursed the freight amount to consignor  then the service tax has to be paid by consignor only.

Regards

SHIVKUMAR SHARMA

AI Summary

GTA service tax liability falls on the person who pays the transporter; reimbursement does not transfer that payment obligation. In GTA service, service tax responsibility lies with the person who makes payment directly to the transporter against the lorry receipt and bill issued in that person's name; if the consignor pays and is reimbursed by the consignee, the consignor is the person liable for service tax when it made the payment.