Stevedoring & Transport Services

[Praveen Kumar]

1. M/s XYZ Pvt Ltd a service provider does stevedoring services (unloading of coal from ship to dockyard) and also does transport services (transport of coal from yard to customer place). M/s XYZ Pvt Ltd doesnt import coal.It only does stevedoring and transport.

2. XYZ Pvt Ltd engages a GTA to transport coal (as XYZ doesnt own trucks). It pays ST on reverse charge.

3. It Invoices transport charges to its customer ABC pvt ltd to whom the coal is to be transported. Should ST be charged by XYZ Pvt Ltd or should it be paid by ABC pvt ltd under Reverse Charge Mechanism considering XYZ Pvt Ltd as a GTA. ?

4. If ST is to be paid by XYZ Pvt Ltd and not under Reverse Charge will Cenvat Credit of Service tax paid under reverse charge By ABC Pvt Ltd be availabe to ABC Pvt Ltd.

[Ganeshan Kalyani]

the service tax liability under reverse charge falls on assesse paying freight. If your client company pays freight then the liability of service tax would have been on them. also it depends on agreemenT between you and your client about freight. secondly for cenvat credit you are eligible to claim credit as it has direct nexus with you output taxable service. the credit can be taken based on tax paid challan.

AI Summary

Service Tax Liability in Transport Services: Reverse Charge Mechanism Explained for XYZ Pvt Ltd and ABC Pvt Ltd A query was raised regarding the service tax obligations for a company, XYZ Pvt Ltd, which provides stevedoring and transport services without owning trucks. XYZ Pvt Ltd engages a Goods Transport Agency (GTA) for coal transportation and pays service tax under the reverse charge mechanism. The question was whether XYZ Pvt Ltd should charge service tax to its customer, ABC Pvt Ltd, or if ABC should pay under reverse charge. The response clarified that service tax liability under reverse charge falls on the entity paying the freight, depending on the agreement. ABC Pvt Ltd can claim Cenvat Credit for service tax paid under reverse charge.