Transport of goods by Vessel under reverse charge basis - Service Tax w.e.f 01.06.2016

[Asked by Guest]

Dear Sir,

Please advise in detail on the point - Whereas such services are provided by the foreign shipping line, then the service tax will be paid by the business entity located in India under reverse charge.

Request you to please advise us when such leviablity will be there under reverse charge basis when the service provider (foreign shipping co.) where import is carried out on CIF value or FOB value.

Further please explain in detail regarding such CIF value and FOB value transactions.

AI Summary

Reverse charge on foreign shipping services: Indian recipient must pay service tax; input credit allowed; excluded from customs value.
Reverse charge applies when a foreign shipping line provides transport of goods by vessel to a business entity in India: the Indian recipient must pay service tax on the value of the service irrespective of CIF or FOB contractual terms. Domestic shipping is taxed under forward charge; services from foreign shipping lines attract reverse charge, with the tax available as input credit and excluded from customs assessable value. Cenvat credit is permitted for eligible inputs, capital goods and input services for outward vessel transport from the customs station.