Service tax on ocean freight


Querist : Anonymous (Querist) 02 July 2012

Facts of the issue.

A ABC Ltd is a company engaged in providing services to exporters. They do not pocess a CHA licence. ABC ltd provides services like preparation of Bill of lading and Handling of cargo, Inland Haulage. ABC ltd gets all these services done by XYZ LTD and XYZ LTD raises an invoice on ABC Ltd. ABC Ltd in turn raises invoices on their customers which includes the bill amount due to XYZ Ltd. ABC ltd does not show the split up between the amount payable to XYZ and charges a premium from their customers. The bill is raised by ABC including the premium.

1) Is ABC ltd liable to pay service tax on the entire amount. The bill from XYZ ltd includes Ocean freight, Currency adjustment factor, Import intermaodal fuel fee, inland haulage, standard bunker adjustment factor, Suez canal fee.
2) If in the invoice the premium is shown separately, will the answer be different?

3)Which are the amounts that will not be reckoned for the purpose of the basic exemption limit?
4)Is there any change in the position after the introduction of the negative list?
5)Is ocean freight a chargeable item under service tax?

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