Taxable value of port services excludes lease-style consideration for exclusive jetty access and back-up land use.

Fixed monthly receipts for granting exclusive use of a jetty and back-up land were not part of the taxable value of other port services. The applicable charging entry under the Finance Act, 1994 covered services rendered by a port or authorised person in relation to vessels or goods, and section 67 applied only where the receipt was relatable to a taxable service. Because the consideration was for exclusive access, not for handling, unloading, storage, or any statutory port function, it fell outside the port-service head for the relevant period. The later 2010 levy changes reinforced that position.

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Issues: Whether the fixed monthly consideration received for granting exclusive use of the jetty and back-up land formed part of the taxable value of other port services under the Finance Act, 1994.

Analysis: The taxable entry for other port services under section 65(105)(zzl) of the Finance Act, 1994, read with the definitions in sections 65(76) and 65(82), was confined to services rendered by a port or a person authorised by it in relation to vessels or goods. Section 67 of the Finance Act, 1994 requires inclusion of the gross amount only where the receipt is relatable to a taxable service. The fixed charges here were held to be consideration for exclusive access to the jetty and back-up land, not for handling, unloading, storage, or any statutory port obligation in relation to cargo. The later shift in the levy by the 2010 amendments also supported the view that, for the relevant period, the charge was not taxable under the port-service head.

Conclusion: The fixed monthly receipts were not includible in the taxable value of other port services, and the demand was unsustainable.

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