Service Tax applicability on import & export of cargo

[Asked by Guest]

(a)Is service tax chargable in case of charter of foreign airlines for import & export of cargo of Indian companies. (b)if foreign airlines is chartered for sending goods abroad for demonstration purposes and the goods are brought back in india on behalf of indian companies

[Madhukar N Hiregange]

The export cargo is exempted undr 29/2005 dt 15.7.2005. Import would be liable. The goods sent for exhibition not being in the nature of export would also be liable.

[Surender Gupta]

In addition to the reply of Mr. Madhukar N Hiregange, I would like to say that sending abroad for demonstration purposes and receiving back the goods in India are two independent activities for the purpose of Service Tax. You may get the benefit of Customs Duties but not of the service tax.

AI Summary

Service tax on air cargo charters: export carriage exempt but import and demonstration-return movements remain taxable.
Applicability of service tax on foreign airline charters for cargo turns on export versus import classification: export carriage is exempt under the relevant notification, while import carriage is taxable. Goods sent abroad for demonstration and returned are not treated as export for service tax purposes; the outward and return movements are separate taxable services, and any customs duty relief does not remove service tax liability.