Servcie tax laibility on servicing Navy vessels thru Kochi Shipyard

[sojan john]

Dear sir,

We are regularly servicing to Navy vessels thru Kochi Shipyard being the authorised service provider M/s Cummins Diesel engines. So far we have not collected on such bills and they claim that they exempted . Kindly advise us the present status and also advise us the solution available before us to avoid from tax liability.

Regards

Sojan

[KASTURI SETHI]

Sh.Sojan John Ji,

This service falls under the erstwhile category of, 'Port Services' under Section 65(105)(zzl) of the Finance Act. Earlier it was exempted vide notification no.31/10-ST dated 22.6.10 which was rescinded vide Notification No.34/12-ST. At present this service is exempted from ST vide Notification No.25/12-ST dated 20.6.12 as amended vide Notification No.3/13-ST dated 1.3.13 (See entry no.25 ).

AI Summary

Port services exemption preserves tax-free servicing of naval vessels through a shipyard under notification-based exemption. Servicing of naval vessels through a shipyard by an authorised service provider is classified as Port Services and is presently covered by a notification-based exemption from service tax, so such supplies should be treated as exempt under the extant notifications cited.