Service tax on demurage

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 May 2013 Whether Service Tax applicable on Demurage?
Example:
We import some material and Lay time given in contract to unload the Ship with in 5 day(Say in Paradip Port).if we unload the material from Ship with in 4 days then exporter give us 1 day Demurage (Despatch Earning) in USD on the basis of our Debit Note.
Question: Whether we charge Service Tax in Debit note which raise to Exporter? If so in which Service Tax Rull?

Ganeshbabu K

Ganeshbabu K (Expert)
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29 May 2013 service tax is not applicable if you are claiming these demurrage charges seperate invoice/debitnote

Generally in these cases c&f agent will give bills two type

one seperate bill for agency charges
and one bill for re-imbursemnet of expences incurred which includes demurrage charges also

if c& f agent provide seperate bill for re-imbursement expences no servicetax is required

Please refer below link, for some detailed clarification

https://www.caclubindia.com/experts/service-tax-on-reimbursement-of-expenses-1310799.asp

And you can refer this article for latest case law analysics with which we can say

Servicetax is not applicable on re-imbursement of expences

https://www.caclubindia.com/articles/reimbursement-of-expenses-not-subject-to-service-tax--15929.asp

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