Service Tax on Goods Transport Agency

[Ashok Chopra]

Freight charged more than Rs. 1500/- on the invoice and neither supplier of the goods is a factory and registered under service tax nor transporter is registered under Service Tax.   Does it my liability to pay service tax on the freight charged on the bill by supplier of the goods? i am a company and registered under service tax 

 

Pls advice accordingly

[JAMES PG]

Who is paying Freight to the transporter ?

[Ashok Chopra]

Freight is being paid by the supplier of goods

[JAMES PG]

As per the changes in the ST Rules effective from 1.07.12, ( Rule 2(1)d B) where the person liable to pay freight is is falling under the specified categories, Viz,  factory registered under or governed by Factories Act, registered society, Co-operative society, Dealer of excisable goods, body corporate or a partnership firm, any person who pays freight or liable to pay freight either is liable to pay Service Tax,

Here the person paying freight is the supplier, who is said to be not a factory. Hence there is no liability on the recipient of the goods since no freight payment is made. In such cases, liability to pay ST rests with the transporter.

[Harsh Jindal]

In case, freight is paid by the supplier of goods and he doesn't fall under the specified category, service tax liability is to be discharged by transporter.

AI Summary

Service tax liability on freight: transporter liable when the freight payer is not within specified liable categories. Where freight is payable by a person not falling within the specified payer categories under the amended service tax rules, the recipient bears no liability and the transporter is obliged to discharge service tax on the GTA service.