service tax on various jobs

[Guest]

We are an International Freight Forwarders Registered in Chennai

Kindly advise the following :-

Whether service tax is applicable on ex-works charges - import from non-taxable territory to India or RCM is applicable , we are doing above job on behalf of our clients (importer in India)

Whether service tax is applicable on ex-works charges -Export from India to non-taxable territory or RCM is applicable , we are doing above job on behalf of our clients (Exporter in India)

Handling charges - import incentive - whether service tax is applicable or RCM applicable

Handling charges - Export incentive - whether service tax is applicable or RCM applicable

Overseas remittance - whether service tax is applicable or RCM applicable

Indirect expenses (admin ) related service tax whether we can taken input.

Overseas detention / Demurrage charges/ repair charges collected from importer located in India,, whether service tax is applicable or RCM applicable

Overseas detention / demurage charges/ repair charges collected from exporter located in India , whether service tax is applicable or RCM applicable.

Whether service tax is applicable on transport charges . service rendered in India (customer factory to port ) - transport charges charged to customer (exporter or importer

Whether service tax is applicable on transport charges . service rendered in India (customer factory to port ) - transport charges charged to overseas counterpart

[KASTURI SETHI]

SH.DHANLAKSHMI R.Ji,

Your firm's activity is covered under Rule 9 (C) of Place of Provision Services Rules,2012 under the category of Specified Services- (C) Intermediary Services. Intermediaries Services include the following

services w.e.f. 1.10.2014:-

1. Freight Forwarder acting as an intermediary (There are four other services also)

Definition of 'Intermediary' as per Rule 2 (f) of POPS Rules, 2012w.e.f. 1.10.2014 “intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the ‘main’ service) or a supply of goods, between two or more persons, but does not include a person who provides the main service or supplies the goods on his account.

You are doing various jobs on behalf of your clients.Hence Service Tax is applicable on ex-works charges under the category of BAS under erstwhile Section 65 (105) (zzb) (vi) (Now 'Other than Negative List')

As per Rule 9 of POPS RULES, 2012, Place of provision is location of Service Provider. There are ten questions/points asked by your firm which are discussed as under:-

For points 1 to 8, location of service provider is in India and your firm is the service provider in India (Taxable Territory). You are liable to pay Service Tax on Ex- works charges mentioned in point No.1 to 8 above. RCM not applicable.

Regarding Point No.9 & 10, Rule 10 of POPS Rules, 2012 is applicable. Who pays the freight will pay Service Tax on the amount of freight after abatement of 70% from the gross amount of freight. Reverse charge mechanism is applicable to GTA service under Notification No.30/12-ST dated 20.6.12 as amended.

These are my views and interpretation. You may ask further question, if any doubt. I also solicit views from other experts on this issue.

[KASTURI SETHI]

Sh. Dhanalakshmi R,

Pl.also peruse Sh.Sanjay Malhotra CS's reply dated 18.5.2015 on this very issue which is in harmony with my reply. Query ID No.108619 dated 18.5.15 refers in this forum.

AI Summary

Freight Company in Chennai Faces Service Tax on Intermediary Services; Transport Charges Get 70% Abatement Per Rule 9(C) An international freight forwarding company in Chennai seeks advice on the applicability of service tax and reverse charge mechanism (RCM) on various charges related to import and export transactions, handling charges, overseas remittance, indirect expenses, and transport charges. The response clarifies that the company's activities fall under 'Intermediary Services' as per Rule 9 (C) of the Place of Provision of Services Rules, 2012. Service tax is applicable to most of the charges, with the location of the service provider being India, making RCM inapplicable. For transport charges, the payer of the freight bears the service tax after a 70% abatement.