Applicability of service tax on light house due paid for the vessel/ship to the Govt.

[samiuddin ansari]

My friend's firm engaged in rendering CHA services & steamer agent services to the various customer/clients. During the course of audit, the audit team observed in light of Board's circular no.192/2016 dated 13.04.2016 read with Section 66D (a)(ii) provided as exclusion of services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport, that the light house dues paid to the Govt. i.e Ministry of shipping, road and transport are chargeable under service tax. My point is whether such statutory and mandatory charges paid to the Govt. in relation to vessel management and safety point of view are chargeable or otherwise. We solicits your expert comments and views supported with Notification, circular or clarification as well as case laws.

AI Summary

Reverse Charge Mechanism limited: lighthouse dues for vessel or aircraft services attract service tax liability on the service provider.
Lighthouse dues paid to the Government are for support services to vessels; service tax applies only if the service is specified under the Reverse Charge Mechanism. Services in relation to a vessel or aircraft were excluded from the notified RCM list, and only the transportation of goods by vessel was later added to RCM. Therefore lighthouse or navigational dues relating to vessels or aircraft do not fall under RCM and the service provider (Government) is liable for service tax.