Dear Sir,
Nice to have a practical situation explained.
I wish to add to you actions my views:
1. There is atrade notice which sets out that the Transporters should not pay the freight. ( nov 07). Maybe this may create some prob. in future
2. Outward rent credit should also be available though the Tribuanls have been vacilating.
Regards
PRAMOD GOENKA <pkgoenka@hotmail.
The practice that my companies follow and which has been scrutinized by departmental auditors without any objection is as under:
1. We pay the freight on carriage inwards. Some of the transporters charge Service Tax in their bills. We do not pay ST on such bills to the department directly. For the bills where the ST has not been realized by the transporter, we pay it directly to the department.
2. We do not pay freight for carriage outwards, but we arrange for the trucks and pay some advance to the transporter. This advance is debited to the accout of the customers. We do not pay any ST on the advance or the total freight - we leave it to the transporter and the customer since we are not utilizing the service of the transporter - it is the customer who is getting the service and therefore liable to pay ST, if at all.
3. ST paid on carriage inwards is used as CENVAT credit for payment of excise duty on production. Here, we take credit for both types of payments - made directly to the department and the amount charged by the transporters in their bills.
4. In our ST returns, we show only the amount on which we are paying tax directly to the department. There is absolutely no need to include the amount where the tax has been realized by the transporters.
CA. Pramod Goenka
To: ICAI_CIRC_MEERUT_CA@yahoogroups. com
From: madhukarhiregange@yahoo.co. in
Date: Sat, 23 Feb 2008 03:43:33 +0000
Subject: Re: {Brainstormers -CA} Service tax on Transporters bill(Urgent)
Where the supplier charges the freight amount in the invoice, he would be adding the margin on that normally. He would be paying the GTA in his own right in that case. Then only he would be only liable.On the other hand if there is a specific agreement that the consignee would be liable, he would pay the freight on behalf of the consignee, then in his books it will only be a recoverable amount and the consignee would have to pay the ST as the amount has been paid on his account.Secondly, the GTA payment is not proper. A Circular has also been issued in this reagrd. If possible you should ask the GTA not to charge. Mr. Jains observation that there should not be double taxation is correct, but you should remember, the revnue auditors are waiting with guns cocked to fire. Many SCNs in this regard could be expected. IN some areas already started by issuing 100s of simlar SCN.Regards
Manoj Garg <mgcute07@yahoo.com> wrote:Dear FriendsMy client who Paid the freight in both cases(ie in case of purchase & sale) and pay Service tax on transporters bill. But in some cases (only in case of Purchase) Supplier charged freight+ Service Tax and in some cases charged only freight (not service tax) in invoice. Now in this case what we do. We should pay service tax or not on freight charged in Bill by supplier.Second question is that Some Transporter Charged Service tax in their invoice.In this case we should pay s.tax or not .If we do not pay s.tax in this case then we should give a declaration to service tax department.Manoj Garg (ACA)9911135324Send instant messages to your online friends http://uk.messenger.yahoo.com
Warm Regards
Madhukar N Hiregange
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Madhukar N Hiregange
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