Applicability of service tax

[Narasimha Subramanian]

We are importing goods from various countries using various MNC Freight forwarders. We found that our freight forwarder is not charging us service tax on the freight amount and origin charges in his invoice. Now, the service tax dept have asked us to pay the service tax on the same stating it was our responsibility to pay the same. What should be our stand as we were under the impression that it was applicable only for unorganized GTA's who did not have systems to charge service tax and not for organized GTA's. The invoice from our freight forwarder also did not have a line that he has not paid the ST and we were liable to pay. What should we do on the same?

AI Summary

Liability for Service Tax on Freight Charges: Importers vs. Freight Forwarders Explained Under Service Tax Regulations A query was raised regarding the responsibility for paying service tax on freight charges when importing goods using multinational freight forwarders. The inquirer believed that service tax was applicable only to unorganized Goods Transport Agencies (GTAs) and not organized ones. The service tax department, however, demanded payment, asserting the inquirer's responsibility. The response clarified that if the freight forwarder acts as a pure agent making payments to the GTA on behalf of the importer, the importer is liable for the service tax. Otherwise, it is the freight forwarder's responsibility to pay the service tax.