Dear Sir,
We are a shipping company based and registered in India.
We understand that Service tax has been levied @ 4.5 % on Import Freight.
My querry is , if the Invoice is raised on an Overseas party for Import freight coming into India, is Service tax levied.
The Invoice is raise don overseas party and payment is also received from overseas, please advise.
As the Company is not based in India so why should they fall into the net of Service tax of India.
Debate on Service Tax Applicability for Import Freight in India: Compliance, Export Status, and Destination Rule Explained. A shipping company in India inquired about the applicability of service tax on import freight invoiced to an overseas party. Three responses were provided. One response stated that since the company is registered in India, it must comply with Indian tax laws, including service tax on freight services up to the Indian customs frontier. Another response argued that the service qualifies as an export and is not taxable, as the service provision occurs outside India. The third response clarified that due to changes effective from June 1, 2016, the service is taxable in India since the destination of goods is India. (AI Summary)
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