TaxTMI 
TaxTMI 
Liability of service tax - Proportionate amount
07 Apr 2007 
3 Replies 
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Guest 
Service tax liability on freight: payer may be required to account for tax and may claim abatement if transporter forgoes cenvat credit.
Liability to pay service tax on freight payments arises under Notification 35/2004 where the payer falls within specified categories and must register; abatement of 25% is available only if the transporter declares non availment of cenvat credit on inputs, capital goods or input services, and classification as Goods Transport Agent or Operator affects the liability and credit consequences. (AI Summary)
Liability to pay service tax on freight payments arises under Notification 35/2004 where the payer falls within specified categories and must register; abatement of 25% is available only if the transporter declares non availment of cenvat credit on inputs, capital goods or input services, and classification as Goods Transport Agent or Operator affects the liability and credit consequences. (AI Summary)
We are purchasing material from supplier named "A". For that material we have awarded work to transporter named "B". B does not have service tax registration number. In this case we liable to pay service tax ? . If we are liable to pay service tax than service tax shall be calculate on 100% amount of transportation or 25% (abatment) of transportation amount.