Claiming refund of service tax charged by cab vendors

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: would be taxable under the category of ‘manpower recruitment and supply agency’s services’ as the same constitutes supply of manpower by you on a temporary basis. Therefore, you are liable to pay service tax on the consideration received for the services provided. The consideration liable to service tax would include the 15% fee as well as the reimbursement of the salary costs, as both these components would together constitute the gross amount charged for the deputation services provided by your institute.

We are a Goods Transport Agency (GTA) that various customers engage for transportation of raw materials and finished goods. The current Budget has made the services ‘in relation to supply of tangible goods for use, without transfer of possession and effective control’ taxable from May 16, 2008. Consequently, supply of goods carriages to us (trucks and lorries) by the owners for transportation of goods became liable to service tax. Since we do not have significant service tax liability, we are unable to claim credit of the service tax paid by us to the owner of the goods carriage and this tax amount is a cost for us. How best we can salvage this situation?

Following representations by the Vehicle Owners’ Associations and others, regarding relief with respect to levy of service tax on supply of goods carriage to GTA for use in the transport of goods, the government has vide notification number 29/2008-Service tax dated June 26, 2008, exempted service tax on supply of goods carriages to GTAs for use in transportation of goods by road. In view of the above, you would not have to bear the service tax cost with respect to hiring of goods carriages from the notified date.

Our service tax payment for the preceding financial year was Rs 53 lakh. We have been advised that we are mandatorily required to pay service tax electronically. Is this correct?

E-payment of service tax has been made mandatory with effect from October 1, 2006 for all assessees who paid service tax of Rs 50 lakh or more in the preceding financial year or in the current financial year. In light of the same, it is mandatory for you to make e-payment of service tax, as the amount of service tax paid by you exceeded Rs 50 lakh during the preceding financial year.