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

Service tax on freight: contractual freight stated in purchase orders is not taxable where actual transport service is not liable.
A supplier receives purchase orders displaying separate ex works and fixed freight amounts while actual transporter charges vary; revenue officers demand service tax on the higher contract freight figure rather than the consignment note amount. The advisory asserts transport by ordinary carriers is not taxable and that only services properly falling within goods transport agency or courier classifications are liable, so tax cannot be imposed without statutory authority and must relate to the actual taxable service provided.