Dear Sir,
I am working in a Transportation company, till September I didnt charge service on transportation charges as service receiver will pay service tax on 30% and 70% abetment under reverse charge mechanism , Now with the mentioned circular Circular No.186/5/2015-ST do I need to charge service tax on Transportation 14% or what is exactly the circular wanted to say. and what would be the effective date if its from 5th october then what about the Invoices which are already raised in between.
Thanks sir.
Circular No.186/5/2015-ST Clarifies 70% Abatement on Ancillary Services in Transportation Charges; Affects Future Invoices Only. A transportation company employee inquired about the implications of Circular No.186/5/2015-ST regarding service tax on transportation charges. Previously, the service receiver paid service tax on 30% of the charges under the reverse charge mechanism, with a 70% abatement. The circular clarifies that ancillary services included in a single consignment note are also eligible for the 70% abatement. Service tax is calculated at 14% on 30% of the invoice value. The circular has prospective effect, so past transactions remain unaffected. It is advised to issue supplementary invoices to charge service tax if not previously done. (AI Summary)
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