We have our owned Barges which are given on hired. If the barge exceed free time as mentioned in the contract for loading, unloading, delivery of goods etc, we are recovering demurrage charges from our customers.
Kindly let us know whether the amount of demurrage recovered from our customer is included in the value of service provided by us & we have to pay Service Tax from 01.07.2012
Regards,
VINAY
Demurrage Charges on Hired Barges Taxable as Part of Service Value Since July 1, 2012, Clarifies Respondent. A business owner inquires about the applicability of service tax on demurrage charges for barges hired out, specifically if these charges should be included in the service value from July 1, 2012. One respondent clarifies that demurrage charges are taxable as part of the hire charges even before the mentioned date. Another respondent adds that since demurrage charges are not included in the assessable value for customs duty, they are subject to service tax. (AI Summary)
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