Liability of service tax on freight

[A RAVINDRA]

As per customer's request, an item was sent to Japan for inspection purpose. Our C&F agancy has sent his bill for the reimbursement of Freight charges on account of exporting the item to japan for inspection purpose as per the requirement of customer. Are we liable to pay GTA service tax on the said freight The said transaction has occured in fy 2008-09

[Rama Krishana]

With effect from 7-7-2009 the provisions related to service tax on GTA in case of export of goods have been modified. Earlier, the exporter was supposed to pay service tax on GTA first and claim refund thereafter.

AI Summary

Service tax on GTA liability altered for export freight-previous pay-then-refund requirement changed by amendment. Whether service tax on GTA applies to reimbursed freight for goods exported for customer-mandated inspection arose for a freight billed by a C&F agent in fiscal year 2008-09. The statutory scheme was amended with effect from 7-7-2009: previously exporters were required to pay service tax on GTA and claim refund thereafter; the amendment changed the levy and relief mechanics for export-related GTA services.