why had my customer pay tax for freight?

[Former Member]

hi guys

I had add a HD00 condition type in delivery note

when I bill to my customer , I found that my customer had to pay tax for freight, why??????????

[Former Member · Accepted solution]

Hi,

As far as payment of service tax in respect of services taken from a Goods Transport Agency (GTA) is concerned, Rule 2(1)(d)(v) of Service Tax Rules, 1994 provides that where the consignee or consignor belongs to any of the following categories, then the person who pays the freight is liable to pay the service tax: i) factory under the Factories Act; ii) company under the Companies Act; iii) corporation established by or under any law; iv) society registered under Societies Registration Act or similar law; v) co-operative society established by or under any law; vi) dealer of excisable goods, registered under the Central Excise Act, 1944; or vii) any body corporate established, or a partnership firm registered, by or under any law. This is the reason why your customer has to pay tax.

regards

prasad