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Service Tax applicabiltiy???

Siddharth S (CA Practice ) (21 Points)

11 August 2009

A courier company loads/unloads our goods from country other than India and transport thru airways and we pay him charges for the same. After that he gives document to CHA, who clears our goods and sends them to us...

Now, are we supposed to pay service tax on the courier company charges(These charges include bringing goods till India)???

If yes on what amount... (should we also pay on import airfreight collected by airlines from our courier company)???

If he has so far billed us all his charges without service tax.. who's liability is it to pay service tax now??? if at all service tax is applicable

Awaiting ur urgent response....

Thanks a lot in advance....

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2 Replies

CA Kingsley (Audit Manager) (470 Points)
Replied 11 August 2009

If the courier company is situated outside India, then you will have to pay service tax. If it is situated in India or has branch in India or place of business, then you dont have any duty to pay service taxes..

If the courier company is foreign company, then you will have to pay service tax on service component. There is no cenvat credit available for such service tax payment. But the service tax so paid can be claimed as credit..

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EKALABYA TALUKDAR (SERVICE TAX CONSULTANT) (666 Points)
Replied 30 August 2009

CHA Organisations follow two types of billing methods

1. They contract wilh a party with the expenses happen for export or import on a fixed price. That means the varioue charges to imports or exports are fixed, where courier company will charges the service tax to the CHA. CHA will charge you with a fixed amount as in the contract, CHA may gain or loose out of this courier deal. As because the billed person is CHA. More over you will not get any CREDIT.

2. The CHA will charge you the resited amount mentioning the bill of courier company and hand over the bill to you. and ask the courier company to make the bill in your name or in your account. The CHA is not gettomg any profit or loss in such transaction. They are satisfied only with their SERVICE CHARGES.

If your are an exporter you will get the courier charges and CHA charges as REFUND if importer you will get the credit