Swami Ayyappa Nuli (TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER) (1372 Points)
08 February 2014My client is paying amount to Shipping agencies for all services.He also paid frieght in connection with export of goods,Does our client liable to pay service charge on reverse charge mechanism on frieght paid?
CA Ashok Agrawal
(Chartered Accountant)
(60 Points)
Replied 08 February 2014
As per Place of Provisions Rule 2012
Rule 10. Place of provision of goods transportation services The place of provision of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of the goods:
Therefore the since the place of provision is out of India that non taxable territory and hence it is out of the perview of Section 66B i.e. charging Section.
No service tax is to be charged on such Frieght.
Manoj Agarwal
(Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com)
(3456 Points)
Replied 08 February 2014
Yes, Ocean Freight is not taxable in the above case
CA RAHUL PATEL
(PARTNER)
(57 Points)
Replied 09 February 2014
Manoj Agarwal
(Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com)
(3456 Points)
Replied 10 February 2014
@ CA Rahul Ji In such a situation, only the commission earned for intermediary service would be taxable and not the freight amount. Irrespective of who is collecting the freitght, it remains ocean freight for transportation of goods for destination outside india and Rule 10 applicable for such freight.
CAclubindia
