Service tax on detention charges: not taxable when characterised as penal rent; pending cases to follow the clarification. The Board examined representations that shipping lines' detention charges were being assessed under Business Support Service or Business Auxiliary Service and concluded that retention beyond the pre-holding period is neither a service on behalf of the client nor infrastructural support, but is properly characterised as penal rent; therefore detention charges are not chargeable to service tax and pending cases should be decided in accordance with this clarification.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Service tax on detention charges: not taxable when characterised as penal rent; pending cases to follow the clarification.
The Board examined representations that shipping lines' detention charges were being assessed under Business Support Service or Business Auxiliary Service and concluded that retention beyond the pre-holding period is neither a service on behalf of the client nor infrastructural support, but is properly characterised as penal rent; therefore detention charges are not chargeable to service tax and pending cases should be decided in accordance with this clarification.
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