co loaders

[KISHOR DATTANI]

One of my client X provides COURIER AGENCY service. They take the services of IATA approved agent Y for air cargo booking just as facilitator to arrange booking in airlines. however, airway bill contains the name of my client X only. My query is whether services of IATA agent would be treated as co-loaders or y's services would be treated as input service ? Plz clarify this with appropriate case laws , if any.

[Surender Gupta]

For the purpose of assessee 'X' (courier agency) the services provided by 'Y' (the IATA agent) would constitute input services only if he is paying service tax on the full value at full rate on the amount received from the client. If 'X' is payment service tax only on his portion of income, the service tax provided by 'Y' would not constitute input services.

AI Summary

Input service entitlement depends on whether the intermediary pays service tax on the full value; partial taxation disqualifies input credit.
The IATA agent's services qualify as input services for the courier only if the agent pays service tax on the full value received from the client at the full rate; if the agent pays tax only on its portion of income, that tax will not qualify as input service tax for the courier.