What is the different category of service tax in India?

DOES AN PROPRIETORSHIP FIRM IN INDIA IS LIABLE TO PAY SERVICE TAX FOR THE FREIGHT PAID FOR TRANSPORTATION OF?

• GOODS BY ROAD. DETAILS: 1. WE HAD BEEN ASKED BY SERVICE TAX DEPARTMENT TO PAY SERVICE TAX FOR THE FREIGHT PAID IN A YEAR WHICH IS BEYOND RS. 1500 PER CONSIGNMENT AND GET REGISTERED UNDER SERVICE TAX ACT. 2. WE ARE NOT REGISTERED UNDER SERVICE TAX ACT TILL NOW. 3. WE ARE PAYING FREIGHT OF RS. 350000 PER YEAR ON AVERAGE TO THE TRANSPORTER FOR TRANSPORATION OF GOODS. 4. OUR FIRM IS IN TO TRADING OF STEEL PRODUCTS ONLY. MY QUERY IS:- 1. DOES A PROPRIETORSHIP FIRM FALLS UNDER THE PURVIEW OF SERVICE TAX ACT. 2. IF YES, THEN IS THERE ANY LEVEL(SLAB) WHICH IF WE CROSS THEN WILL COME UNDER THE SERVICE TAX ACT PLEASE SUGGEST :-)

• Answer:

  Service Tax is payable on freight paid for goods transported by Roads.It is not status wise, it is service wise. If any concern whether proprietorship or partnership or otherwise is paying freight for goods transported by road. it is liable for service tax duty. There is exemption slab of Rs 1000000 for other service but not in case of Goods Transported by Road.There are certain other exemptions for this service like a consignment on which freight of Rs 750 or less paid, is not liable for service tax. Similarly all consignments booked together for freight for Rs 1500 or less are also not liable to tax. Further all freight liable to tax is sum up and a abatement of 75% is given and remaining 25% of taxable freight is charged service tax @ 10.30%. In case of proprietorship firm it is payable on quarterly and return is required to be filed on 6 monthly basis.