CMA Sameer Epari (CA Final Student) (409 Points)
04 January 2012DEAR ALL,
ONE COMPANY PROVIDING CARGO HANDLING SERVICES....WHICH PAY FREIGHT CHARGES AND CLAIMS THE SAME FROM THE CUSTOMER IN ADDITION TO SERVICE CHARGES.
WHETHER THE FREIGHT CHARGES ALSO APPLICABLE TO SERVICE TAX....? IS THERE ANY CIRCULAR SAYING FREIGHT CHARGES ARE EXEMPTED FROM SERVICE TAX ?
PLEASE ADVISE ON THIS....
THANKS
SAMEER EPARI
CA Prabhat Gupta
(Manager (Indirect Taxes))
(821 Points)
Replied 04 January 2012
Please refer to Point F (2) in the link below. The same is produced below:
"Section 65(23) which defines cargo handling service is being amended so as to include services of packing together with transportation of cargo or goods, with or without one or more other services like loading, unloading, unpacking, under cargo handling service. With this amendment, packing with transportation will be classifiable under cargo handling service only."
Please wait for other opinions too.
CMA Sameer Epari
(CA Final Student)
(409 Points)
Replied 05 January 2012
Dear Prabhat Sir,
Thanks for your advise. WHILE SEARCHING FOR THE NOTIFICATION ON NET I GOT A NOTIFICATION HAVING NO.F.NO.B.11/1/2002-TRU DATE 1ST AUGUST 2002
WHICH SAYS THAT IF THE COST OF TRANSPORTATION IS SHOWN SEPARATELY IN THE BILL RAISED,WILL BE EXCLUDED FROM THE LEVY OF SERVICE TAX. IF THE COST OF TRANSPORTATION IS CLAIMED ON ACTUAL BASIS,THEN IT WILL NOT BE INCLUDABLE IN THE TAXABLE VALUE OF CARGO HANDLING SERVICES.
THIS IS FOR YOUR KIND INFORMATION
CA Prabhat Gupta
(Manager (Indirect Taxes))
(821 Points)
Replied 05 January 2012
Mr. Sameer,
I went through the above Instructions issued vide F.No.B.11/1/2002-TRU. These instructions were issued in 2002, i.e., before introduction of service tax on transport of goods by road, air & other modes. Before this goods transport operators were covered under the service tax net, but the same was continuously under disputes until finally Transport of goods by road service was introduced.
I would like to bring to your notice D.O. F. No.334/1/2008-TRU dated 29.02.2008, wherein the definition of Cargo Handling service was amended in Finance Bill, 2008. The same is produced below:
"5.2.2 Section 65(23) which defines cargo handling service is being amended so as to include services of packing together with transportation of cargo or goods, with or without one or more other services like loading, unloading, unpacking, under cargo handling service. With this amendment, packing with transportation will be classifiable under cargo handling service only."
Hence, it seems that the new amendment supersedes instructions issued prior to Finance Bill, 2008.
D.O. F. No.334/1/2008-TRU dated 29.02.2008 is attached below for reference:
CAclubindia
