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TMI BlogFreight charged along with raw material InvoiceX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Experts, We are registered manufacturer in Central Excise and Service Tax Department. We are liable to pay service tax under GTA services as a service receiver. Our some Raw material supplier shows freight amount in raw material invoice. They are not raising seperate freight invoice nor GR in our favour. Are we liable to pay service tax on such freight amount. Please advice. Thanks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Reply By MANDAVILLI RAMAKRISHNA - The Reply = you are liable to pay both vat and service tax - Reply By manju nath - The Reply = Sir, As per my knowledge when supplier shows freight amount in raw material invoice. There is no need to pay service on such freight amount. Thanks c.k.manjunath 8903156245 - Reply By Pawan Sehrawat - The Reply = Hi all....... What practic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally i have seen a lot is, If supplier is showing freight in invoice, he should not charge VAT on it, as most of VAT Act's have this provision to exclude freight from taxable value. Further under reverse charge mechanism who so ever pays freight is liable for service tax. (This is based on queries raised even by Service Tax auditors also). Further what you can ask from your supplier is, inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead of putting freight word in invoice, they can put "Other charges" hereby you can evade any service tax complication. Thanks. - Reply By RAM SHARMA - The Reply = Pl. tell any rule or judgement in this regard. Thanks - Reply By manju nath - The Reply = Rule 5(2) provides that the expenditure or cost that a service provder incurs, as a pure agent of the clinet , shall be excluded from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he value if such serice provider fulfils prescribed conditons. (1) The service provider act as a pure agent of the recipient of service when he makes payment to third party for the goods or services procured: (2) The recipient of service receives and uses the goods or services so procured by the service Provider in his capacity as pure agent of the recipient of service. (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The recipient of service is liable to make payment to the third party. (4) The recipient of service authorizes the service provider to make payment on his behalf: (5) The recipient of service know that the goods and services for which payment has been Made by the service provider shall be provided by the third party. (6) The Payment made by the service provider on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recipient of service has been Separately indicated in the invoice issued by the service provider to the recipient of Service. (7) The service provider recovers from the recipient of service only such amount as has been Paid by him to the third party: and (8) The goods or services procured by the service provider from the third party as a pure agent Of the recipient of serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice are in addition to the services he provides on his account. SINCE THIS IS A CASE OF PURE SALE, ONLY GETTING REIMBURSEMENT OF THE FREIGHT PAID BY HIM INTIALLY, AS SUCH THE LIABLITY FOR PAYMNET OF SERVICE TAX WILL BE ON SUPPLIER. - Freight charged along with raw material Invoice - Query Started By: - RAM SHARMA Dated:- 31-10-2013 Service Tax - Got 5 Replies - Service Tax - Discussion Forum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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