SERVICE TAX PAID ON TRANPORTATION UNDER ABATEMENT

[SURYAKANT MITHBAVKAR]

We have cleared goods to our customer and transportation charges for the same paid by us.

As per purchase order terms transportation charges to be recovered from customer against raising debit to them.

The above case transporter raise invoice in our company and stating Service tax liability payable by us (Since we are PVT Ltd. Company).

According to the transporter Invoice we have paid Service tax liability under abatement (@30% )

Now, We have to raise debit note to our customer for transportation charges paid by us on behalf of customer. Whether we can show separate service tax amount paid by us (30%) showing service tax paid on your behalf with basic transportation amount or we have to add the service tax (30%) with basic amount.

Please advice

[KASTURI SETHI]

SH.SURYAKANT MITHBAVKAR,

Since you are bearing the element of Service Tax on freight, you may show separate amount of ST. No contravention in this way. Rather convenient for both even for audit purpose.

Whether freight is to be shown separate or not in the invoice ? It was for Central Excise purpose in the by-gone era.

In Service Tax no problem.

[Ganeshan Kalyani]

I endorse the views of Sri Kasturi Sir.

[Suryanarayana Sathineni]

Dear Friend,

While concurring with the views expressed by Shri. Kasturi Sethi Ji, I would like to say, the service tax amount paid by you on the transportation charges paid on behalf of the customer as per the agreement, is not availed by you as credit, then you can include the same in your debit note while getting the reimbursement .

Best Regards

Suryanarayana

AI Summary

Service tax on transportation can be shown separately and reimbursed when paid on the customer's behalf. Where a supplier pays service tax on transportation under abatement on behalf of a customer, the supplier may show the service tax separately in the debit note and recover it as reimbursement if the supplier has not availed input tax credit; separate disclosure aids audit and is permissible under service tax invoicing practice.