Transport Charges

[HEMANT GUPTA]

I have little confusion regarding service tax so please clarify the same.

Case:-

We charge in invoices freight as transportation charge of ₹ 100000 but we pay to Transporter of ₹ 55000.00 only.

Confusion 1. Whether Service tax would be charge on ₹ 100000 under Business Auxiliary Services or Not.

Confusion 2. Whether Service tax would be charge on ₹ 55000.00 under GTA or not.

Confusion 3. If we pay Service Tax on both i.e. ST on ₹ 100000 under Business Auxiliary Service and ST on ₹ 55000 under GTA (Reverse Charge) then it would be double taxation. Whether it is right or not.

AI Summary

Service tax on transport charges: invoiced freight is taxable and consignor reverse charge creates separate liability and credit limits.
If a seller invoices freight to a buyer, service tax is leviable on the invoiced freight irrespective of the lesser amount actually paid to the transporter. A consignor who pays the transporter under the reverse charge mechanism must discharge service tax on that payment but cannot claim it as input service credit; credit may be available to the consignee. The difference between invoiced freight and paid freight will be considered in excise valuation and may attract duty on the differential.