service tax on ocean freight charged by a freight forwarding company

[Sanjeev Sharma]

Whether service tax applicable on charging of ocean freight by a freight forwarding company in India ? Please note that it charges ocean freight as per rates negotiated with the clients . Shippling lines in turn raises bills on the freight forwarding company. The difference is the margin of freight forwarding co.

[Rama Krishana]

Best option in the present case is forwarding agent should pay service tax on the whole of the amount charged from the client. They can take the credit of service tax paid by the shipping line. This case is beneficial to all where the client is also eligible to take the credit or take the refund.

[Rama Krishana]

Let me correct, the shipping line is not liable to pay service tax on foreign going freight. But, at the same time, CHA or C&f agents have to determine the nature of amount received from the client to claim the benefit of reimbursement. Are they pure agent? A big question to be solved first to get the answer to this query.

AI Summary

Service tax on ocean freight: freight forwarders treat billed freight as taxable and may claim credit of shipping line tax.
Treat the entire ocean freight amount charged by the forwarding agent to the client as taxable; the forwarding agent can claim credit for service tax paid by the shipping line. Shipping lines are not liable for service tax on foreign-going freight. Whether a CHA/C&F agent qualifies as a pure agent for reimbursement affects characterisation of receipts and the availability of reimbursement treatment for tax purposes.