Service tax on detention charges--

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Dileep Kumar Gupta (Querist)
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27 March 2008 Whether detention charges paid to the Carrying & Forwarding agency (say GTA's)will attract the provision of service as in the case of GTA's? Whether such charges shall be treated as part of transport expenses for applicability of Service Tax?

Dayal

Dayal (Expert)
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01 April 2008 Detention charges are excluded from the purview of service tax

However it is always construed to be an element of freight.

Since the Transporter may have an arrangement with the receiver to escape liability on account of freight under the pretext of detention charges, the same will stand to be covered.

There is no point in debating as this can never be established that it is purely detention charges.

It would be ideal to pay and close the matter since you are required to pay on 25% of the amount, since these transaction are of stray nature, It is advised to pay and close the matter

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