Service tax on transportation by supplier of Goods

[Shyam Naik]

Dear All,

We are purchasing Charcoal from one supplier.

The supplier has quoted price of ₹ 400 per ton + applicable Sales Tax. The supplier shall also undertake the transportation of the goods to our plant and charge ₹ 700 per ton.

Whether we are liable to pay service tax on RCM basi

AI Summary

Company Not Liable for Service Tax on Charcoal Transport; Supplier Bears Responsibility Under Reverse Charge Mechanism A discussion on a forum addressed whether a company purchasing charcoal and paying for its transportation is liable to pay service tax on a reverse charge mechanism (RCM) basis. The consensus among participants was that since the supplier handles and pays for the freight, the responsibility for service tax falls on the supplier. It was also noted that this liability does not apply to courier companies registered as Cargo Management Services, such as Blue Dart or DHL.