Dear Experts,
We received Ex works order from customer, after wards customer requested us to engage a transporter on behalf of us to deliver goods at our premises and also confirmed to pay 5,00,000/- towards freight charges to us, in turn we need to pay the same to transporter who engaged the vehicle to deliver goods. In this transaction I request you to give advice on following clarifications :
1) Transporter charging to us for 5,00,000/-
a) Service Tax applicable ? who has to pay ?
2) Same amount we are claiming from customer through invoice
a) Service Tax Applicable ? who has to pay
3) If i am paid already service tax on Transporter bill, again we need to pay against collected from customer ???
Ramesh
Service Tax on Freight: Liability Lies with Payer, Reimbursement Doesn't Transfer Responsibility. Consignment Note Determines Tax Obligation. An individual inquired about the applicability of service tax on freight charges in a transaction where they engaged a transporter to deliver goods at a customer's request. The customer agreed to reimburse the freight charges of 5,00,000/-. The individual asked whether service tax applies to both the payment to the transporter and the reimbursement from the customer, and who is liable to pay it. The response clarified that the service tax on Goods Transport Agency (GTA) is the responsibility of the person paying the freight, and reimbursement from the customer does not transfer this liability. If the consignment note is in the individual's name, they must pay the service tax under reverse charge. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
