Reverse Charge

[Ashok Chopra]

Respected Forum,

My company is receiving goods from party in full load truck.

Payment of freight is made to transporter by party, both transporter and party are a proprietory company

Party charging freight from me in the bill as 'Cartage', which i am booking as 'Cartage Inward'.

Please guide me:-

Whether i am liable to pay service tax on the cartage, which is charged from me by the party?

if yes, pls let me know w.e.f. 01-07-2012 i have not paid Service Tax on it, should i pay arrear with interest and whether i will be liable to take credit of said amount?

pls provide me copy of notification and clarifications of the department for my record purpose

please guide me accordingly

 

[GANTI SARMA]

How you are paying service tax on transportation without transporer bill ? Transporter will collect amount from supplier of goods with service tax if transporter having courier registration other wise supplier will pay on basis of transporters bill. Secondly you have to book entire bill amount as a purchase value and don't split and book a "Carriage Inward". Then your are not liable to pay service tax. 

AI Summary

Service tax liability on cartage: buyer should book full invoice as purchase value and not bear reverse charge. The buyer is not liable to pay service tax on cartage charged by the supplier where the transporter or supplier accounts for service tax; the buyer should book the full invoice as purchase value and not split out 'Carriage Inward,' thereby avoiding a reverse charge obligation.