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TMI BlogService Tax Liability (E-commerce transaction scenario)X X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Sirs, There are four companies in discussion - S is Supplier,; C is Customer, P is e-commerce portal and T is transporter.The arrangement is B2B and is explained as - Customer C orders material on the e-commerce portal of company P to Supplier S . The e-commerce portal P has taken responsibility to service the order and has got into agreement with transporter T to pick ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material from S warehouse and deliver to location of C by road. The transporter T will raise freight charges invoice on e-commerce company P (Say freight charge is ₹ 90/-) E-commerce company P raises an invoice to the Supplier S mentioning freight charges component as ₹ 100/- (i.e mark up of ₹ 10/- is there in freight charges) along with payment of material cos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as agreed between P and S . As per Reverse Charge Mechanism, for Point 3 above, where Transporter T , a GTA, is providing transportation services to E-commerce company P and freight charge is paid by P . In this scenario, liability of S.Tax payment lies on P . ie 4.35% of the freight value (4.35% of ₹ 90/-). Questions: Now P an e-commerce company is charging freight to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplier S as ₹ 100/- instead of ₹ 90/-. In this scenario, who is liable to pay Service tax on transportation (freight value ₹ 100/-). Can P pay the S.tax to the department. Say, If P pays the S.Tax for the scenario in Question 1, then what is the net liability of P on service tax considering input and output service tax. What is the service tax liability of all four ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties involved in the above arrangement. Request your valuable suggestions and advise. Regards, Pallav Singh - Reply By Ganeshan Kalyani - The Reply = Freight should be paid by 'P' as transporter is getting payment from 'P'. Further since it is buying and selling activity there is no service tax liability . - Reply By Pallav Singh - The Reply = Thank you Ganeshan Kalyani...I am clear now t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat since T (a GTA) is providing transportation services to P hence the service tax liability lies on P as per reverse charge mechanism. But It may be noted that P is marking up the freight value ( from ₹ 90 paid to Transporter T to ₹ 100/-). He is charging ₹ 100/- for transportation of material of Supplier S but not as a GTA. Sale transaction of material is clear a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is not under the ambit of S.Tax. But the transportation services rendered by P to S is a Service (though indirectly through transporter T ). Hence the question no 1 and 2. Thanks and request your valuable advise. Regards, Pallav - Reply By Ganeshan Kalyani - The Reply = 'P' is recovering the freight so paid to 'T' from'S' under the heading GTA with profit therfore it will also attract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax. - Service Tax Liability (E-commerce transaction scenario) - Query Started By: - Pallav Singh Dated:- 5-1-2016 Service Tax - Got 3 Replies - Service Tax - Discussion Forum - 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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