18 September 2007
thank you for your prompt reply, GUL. if i m not mistaken there is no service tax applicable on the OCEAN FREIGHT. pl recnfm. the service tax is on the THC [terminal handling charges] and DOC charges which is charged by the line to him and same is collected from shpr and repaid to line . he is not pocketing the service tax collected from the shpr. he is only collecting service tax and paying to the line. also note he is not mentioning word 'SERVICE TAX' in the bill. so is it still not correct??? also note service tax is clubbed in the THC amount and DOC amount and billed to the shpr. if he obtains the service tax no. then on wat element the service tax is applicable to him?? also adv under which a/c head this business is covered to be liable for service tax??
Please have a look at this and please let me know whether this clarifies your doubt
It has been pointed out that Container Freight Stations that they do not have any direct contact with the importer and they only provide facility to the Customs House Agents (CHA) to handle the container and import cargo for which they have a contract on a mutually agreed rate. It is the CHA who claims all the charges from the importer including the charges made by the CFS on CHA and remit to the CFS. Since services of a CHA is already covered under the tax net, the CFS service providers should be exempt from tax when the billing is done on CHAs; otherwise there will be double taxation. The above contention is not correct. In the case of CHAs, the service tax is levied only on the agency or agency and attendance charges and not on the reimbursible expenses (on actuals basis) such as port fees, statutory levies, landing and container charges, dock fees, examination charges, terminal handling charges, etc. The CHA does not pay service tax on the handling charges charged by the CFS. Thus there is no double taxation. Further, as per the law, whatever charges, the cargo handling agency charges from any person (including the CHA) is liable to service tax.
I m still not able to understand whtr service tax is applicable or not on the profilt margin.
i wl retierate again -
1) Company only selling Ocean freight to the shpr. for eg. ocean frt for a 20' cntr to kuwait is USD 850. This Co. adds his profit margin of USd 100 and sells to the shpr. Shpr picks up line's cntr and loads on vsl. Here Invoicing includes - Ocean Frt Terminal Handling Charges incl. Service tax [THC] Documentation Charges incl Service tax [DOC] The above THC and Doc charges are wat is charged by the line. we just collect from the shpr and pay to the line. This THC and DOC charges are open in the market in the sense that everybdy knows the THC amount charged by the port, same charged by the line and DOC charged by the line. No profit element added in this. They even dont show the word 'Service tax' in the Invoice.
My question is -
1) under wat a/c head this company wl fall to be liable for service tax???
2nd Question is, profit earned by the co. is only on freight quoted to the shpr, so is it liable for service tax?
3rd Question is, is the invoicing correct???
4th Question is, does the co. have to pay service tax to the govt, wat it collects from the shpr on THC and DOC charges???
5th Question is, is it mandatory for the co. to obtain service tax no?? Wat shd be the turnover to obtain service tax no?
pl revert on top priority basis as co, has still not paid any service tax to the govt nor claimed any no.
CAclubindia
