Pradeep Jain - Chartered Accountant

Dear Sir, Kindly let me know the person liable in the following case. A COMPANY is purchasing goods by way of a Purchase Order issued on supplier by specifying freight extra at actuals on P.O. Also, the supplier (Manufacturer of goods)(COMPANY) while giving quote for the material supply, clearly specifies that price is ex-factory and mentions that, transportation charges to be borne by purchaser. Now, the purchaser receives the invoice for material value followed by a debit note for the transportation charges paid to the transporter (backed up with consignment note issued by the transporter (GTA/NOT no idea) where supplier co. is the consignor & purchasing co. is the consignee). pls. let me know the liability of supplying/purchasing company w.r.to payment of service tax to the dept. under REVERSE CHARGE MECHANISM if applicable.

Reverse charge is applicable on transport of goods by road. Here the liability of payment of service tax falls on the person who is liable to pay or pays freight. However, the seven categories of person are liable to service tax under reverse charge as per provision of Rule 2(1) (d)(v) of Service tax Rules. If you do not fall under these categories then the service tax will fall back on transporter. This is subject to exemptions available under GTA services. Therefore in above case the liability to pay service tax will fall on you as you have paid freight. To avoid that liability, one has to prove that the manufacturer is paying the freight as an agent of the buyer. In that case, the service tax liability will fall back on supplier of the goods.

Sir, we are a taxpayer dealing in health care services. We have been making supply on which tax was payable by us but we have not paid the same erroneously. The same has been pointed out by department recently. Please suggest whether we have to pay interest and penalty along with tax.

As per sub-section (5) and (6) of Section 73 of CGST Act, if you have made payment of tax and informed the same to the department then the department ...
Sir We are dealing in trucks. We have received an export order from foreign buyer. We wish to procure trucks from 5 different manufacturers and supply them directly to the port without receiving on our own premises. Can we do the same to take benefit of merchant export by paying tax @ 0.1%.

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