SERVICE TAX ON FREIGHT COLLECTED FROM CUSTOMER

[piyush agarwal]

I am a manufacturing unit. I have issued a excise invoice and charge freight seperately on the invoice. i have collected 12 lac as freight from customer and paid to GTA ₹ 10 lac. ₹ 2 lac is my income. Neither i have charged any excise duty nor service tax on ₹ 12 lac. Now my question is whether i am liable to pay service tax and if required then at what about and under what circumstances.

AI Summary

Debate on Service Tax Liability: 10 Lakh Paid to GTA Subject to RCM, 2 Lakh Profit Exempt, Conflicting Views Arise. A manufacturing unit queried about the liability of service tax on 12 lakh freight collected from customers, of which 10 lakh was paid to a Goods Transport Agency (GTA) and 2 lakh was retained as income. The consensus among the participants was that service tax is applicable on the 10 lakh paid to the GTA under the reverse charge mechanism (RCM) but not on the 2 lakh profit. However, some participants argued that the entire 12 lakh should be considered for service tax. The discussion highlighted differences in interpretation of service tax law and its application to freight income.