Service tax on Loading & unloading charges

[Raj Malik]

1.Our Company is paying cash payment for loading & unloading charges to casual person. Will reverse charge be applicable under manpower supply.

[KASTURI SETHI]

Under whose control are casual persons ? Any agreement with contractor or recruitment agency ?

[Raj Malik]

They are just casual persons which are hired at the time of loading and unloading. There is no contract with any agency.

[KASTURI SETHI]

2.9.4 What is the status of services provided by casual workers or contract labour ?

If…….taxable	Then…….
Services provided by casual worker to employer who gives wages on daily basis to the worker	These are services provided by the worker in the course of employment
Casual workers are employed by a contractor, like a building contractor or a security services agency, who deploys them for execution of a contract or for provision of security services to a client	Services provided by the workers to the contractor are services in the course of employment and hence not taxable. However, services provided by the contractor to his client by deploying such workers would not be a service provided by the workers to the client in the course of employment. The consideration received by the contractor would therefore be taxable if other conditions of taxability

This is relevant extract of an Education Guide issued by CBEC which is self explanatory.

[Ganeshan Kalyani]

I agree with the views of Sri Kasturi Sir.Thanks.

[YAGAY and SUN]

You should work according to your facts and also take care about the Negative Tax Regime. If you can avail the CENVAT credit on stakes are no so high then please pay it off and relax.

[Raj Malik]

Sir,

In my case there are 2 situations:-

1. Company is charging loading & unloading exp in sale invoices to the customer which is further not paid to any person or agency. It mean that its an income for the company.

2. In some case they have made payment to 3rd person which is neither related to the company nor their is any contract with them. These are random persons which are deployed at the time of loading.

Kindly suggest the applicability in above mentioned cases.

[KASTURI SETHI]

Loading and unloading also fall under GTA Services. (Goods Transport by road).

[Ganeshan Kalyani]

Sir, in point no.1 service tax is payable since the amount collected from the customers is an income to you. But if the amount is collected from customer is only for the purpose of paying the same to labour who has rendered loading /unloading service to you and has no profit element in it then you can claim that you have acted as a pure agent. But as you declared that the amount collected from customer is not paid at all then in my view service tax is applicable. Whether small scale exemption benefit you can avail or not has to be seen here.

In second point service tax is not applicable because of clear cut reason as explained by an expert Sri Kasturi Sir. Thanks.

[MUKUND THAKKAR]

please clarify are you showing the loading and unloading charges in invoice after charging of excise duty or before that?

[Raj Malik]

We are showing Loading charges after charing excise duty

[KASTURI SETHI]

Sh.Raj Malik Ji,

True and complete facts of a query should be posted in one go. You are disclosing the facts in piece meal and that too on request of Sh.Mukund Thakkar, an expert. Non-disclosure of facts is a loss for a querist.

[rishabh neema]

Sir if a mandi dealer paid loading/unloading charges to a labour and such labour is used on agricultural produces.

will this covered under reverse charge ?

AI Summary

Service tax on loading and unloading charges: taxability depends on income retention versus pure agent pass through status.
Service tax depends on whether loading/unloading collections are retained as company income (taxable) or are exact pass throughs meeting pure agent conditions (not taxable); additionally, services by workers to their employer are in the course of employment and not taxable, whereas a contractor's deployment of labour may render the contractor's consideration taxable; Goods Transport Agency treatment may also apply.