Service Tax Charged on the Transportation cost

[Guest]

Dear All,

We have bought a machinery, In the invoice supplier is being charged Machinery cost Plus Vat  &

Transportation cost  Plus service tax thereon.

My question is that can he charged service tax on transportation cost in the invoice? 

[YAGAY andSUN]

No, your supplier is not authorised to charge the service tax on GTA services on the face of an Invoice.  Under GTA services whoevers pay the freight amount, is liable to pay the service tax.

[NEERAJ KUMAR, RANCHI]

Kindly check if the supplier has charged only transportation charges or transportation charges plus service tax. As Mr khatri has correctly suggested that he can not charge service tax from you. But yes, he can charge transportation charges, if the place of removal of goods is not factory gate but your premises, then as per transactional value  it is correct to add transportation charges in assessable value and to charge central excise duty over that amount. But after charging c ex duty he can not charge transportaion charges additionally and in no case he can charge s. tax

[RadheyShyam Mangal]

Only possibility of charging transportation and service tax can be a situation when the supplier has paid freight on your behalf . If the delivery terms are of FOR, then Excise Duty may have to be paid on a value after adding transportation cost.

AI Summary

Supplier Can't Charge Service Tax on Transport Costs; Freight Payer Liable Under Certain Delivery Terms. A query was raised regarding the legality of a supplier charging service tax on transportation costs in an invoice for machinery. Three responses clarified the issue. The first response stated that the supplier cannot charge service tax on Goods Transport Agency (GTA) services on the invoice; the payer of the freight is liable for the service tax. The second response confirmed that while transportation charges can be included in the assessable value for central excise duty, service tax cannot be charged. The third response noted that service tax might apply if the supplier pays freight on behalf of the buyer under certain delivery terms.