Applicability of service tax on transporation/ freight charges

[SANDEEP GUPTA]

Sir,

One of my client (Pvt. Ltd. co) who is engaged In providing logistics service to exporter and importers as well. company arrange transport vehicle from the open market, and such agency issue consignment note/ bilty/ lorry slip in fevour of this logistic company. Such logistics company do not issue any consignment note but raise a slip for taking receipt of goods only. Will such services be taxable under GTA or covered under negative list & not taxable at all.

Since transportation/ freight charges of truck, ship and airlines are paid by such company, please state whether liability will arise under service tax.

AI Summary

Logistics Firm Seeks Clarity on Service Tax for Freight Charges Under GTA Rules and Reverse Charge Mechanism A logistics company is seeking clarification on the applicability of service tax on transportation and freight charges. The company arranges transport for exporters and importers and pays freight charges but does not issue consignment notes. The discussion revolves around whether the company should pay service tax under the Goods Transport Agency (GTA) rules or if the service falls under the negative list, exempting it from tax. Various experts suggest that the company is liable for service tax under the reverse charge mechanism because it pays the freight, even if acting as an agent. The company can claim CENVAT credit for service tax paid under reverse charge. The discussion also touches on the implications of issuing consignment notes and the taxability of bundled services provided by the company.