S.T. on excess freight received from purchaser than paid to transporter

[mehta pradip]

 

We are supplying over-head conductors to Electricity Boards against there order.  As per Purchase Order, the Ex-Works prise and freight charges are mentioned separately.  The freight charges per Kms are fixed irrespective of distance of destination within Gujarat.  We mention the Ex-Works price and freight charges separately in our Excise Invoice.

 

However, the actual freight charges paid by us to the transporter is some times higher and some times lower than mentioned the Purchase Order.

 

Whenever, the amount mentioned in Purchase Order is more than the consignment note, the department is insisting to pay service tax on the amount mentioned in purchase order and not on the amount mentioned in consignment note.

 

Please advice your opinion in this matter.

 

AI Summary

Tax Dispute: Company Challenges Tax on Freight Charges Stated in Purchase Order, Citing Legal Authority and Transportation Rules. A company supplying overhead conductors to Electricity Boards is facing a service tax issue. The Purchase Order specifies separate Ex-Works prices and fixed freight charges per kilometer, but actual freight costs sometimes differ. The tax department insists on taxing the freight amount stated in the Purchase Order rather than the actual consignment note. A respondent criticizes the department's approach, arguing that under Indian law, taxes should not be collected without legal authority. Transportation is on the negative list, meaning it's not liable for tax unless involving a Goods Transport Agency (GTA) or courier, where specific conditions apply.