Terminal Handling Charges - Reimbursement of charges service tax liability

[Guest]

Dear Sir 1. Whether Terminal Handling Charges (THC) done by Shipping agents comes under “Business Support Services”? 2. If X limited paying THC to Shipping agents & reimburses same amount it from his customer, Y, whether Service tax liability arises for X limited? 3. Whether any liability if reimburses with profit from his customer, Y? 4. If assessee applies for new registration, after 7 days, if no response from department. There will be a deemed registration. Suppose if the assessee has not received any registration certificate, what should be done? How to mention registration certificate number in half- yearly returns?

AI Summary

Clarification on Service Tax Liability for Terminal Handling Charges: Reimbursements Taxable Only if Not as Pure Agent. A query was raised about the service tax liability on Terminal Handling Charges (THC) managed by shipping agents and whether these charges fall under 'Business Support Services.' It was questioned if a company paying THC and reimbursing it from a customer incurs service tax liability, especially if the reimbursement includes profit. The response clarified that under the Service Tax (Determination of Value) Rules, 2006, reimbursements qualify as taxable only if conditions for being a 'pure agent' are met, including no profit margin. For registration issues, a reminder can be sent, and the PAN number followed by ST-001 can be used as a registration number in returns.