Service tax on ocean freight
This query is : Resolved
23 December 2011
Dear sir/s,
1.who is liable to pay service tax in case of ocean freight?
2. Is it payable under reverse charge method by service receiver?
3. Please mention notification, circular or case law in this regard for reference?
4.Is ocean freight attracts TDS or Not?
Please reply early
Thanks in Advance
1.who is liable to pay service tax in case of ocean freight?
2. Is it payable under reverse charge method by service receiver?
3. Please mention notification, circular or case law in this regard for reference?
4.Is ocean freight attracts TDS or Not?
Please reply early
Thanks in Advance
24 December 2011
1. Please check whether your case is covered under Notification No. 17/96-Service Tax dt. 6/6/1997.
Message likes :
1 times
25 December 2011
Dear sir
it is covered in this notification, but sir the service provider is not charging any service tax on its invoice.
In invoice, the amount is showing under not taxable column.
so plz clarify me sir, Is it taxable or not?
it is covered in this notification, but sir the service provider is not charging any service tax on its invoice.
In invoice, the amount is showing under not taxable column.
so plz clarify me sir, Is it taxable or not?
26 December 2011
Dear chakrapani sir,
Plz clarify my doubt.........
Plz clarify my doubt.........
24 July 2025
Here’s a detailed response on **Service Tax on Ocean Freight** as of around 2011-2012:
---
### 1. Who is liable to pay service tax on ocean freight?
* The liability to pay service tax on ocean freight depends on whether the service is provided by an **Indian shipping company** or a **foreign shipping company**.
* **For shipping services provided by Indian shipping companies to exporters** for carriage of goods by sea, service tax is **payable by the service provider (shipping company)**.
* However, when the shipping service is provided by a **foreign shipping company (i.e., a company not registered in India)**, the Indian importer or the recipient of service (i.e., the importer) is liable to pay service tax under the **reverse charge mechanism (RCM)**.
---
### 2. Is it payable under reverse charge method by the service receiver?
* Yes, **reverse charge applies when the shipping service provider is a foreign shipping company**.
* The **importer or recipient of the service in India** is liable to pay service tax on the freight charges.
* This was introduced by Notification No. 30/2011-ST dated 20-06-2011, where ocean freight service provided by a foreign shipping company is taxable under reverse charge.
---
### 3. Relevant notifications, circulars, case laws
* **Notification No. 30/2011-ST dated 20-06-2011**: Imposed service tax on ocean freight services provided by foreign shipping companies under reverse charge.
* **Circular No. 138/9/2011-ST dated 20-6-2011** clarifies the applicability of reverse charge on ocean freight.
* Also refer to **Section 68(2) of the Finance Act, 1994**, relating to reverse charge.
---
### 4. Does ocean freight attract TDS?
* As per the Income Tax Act, **TDS (Tax Deducted at Source) is not applicable on freight charges paid to a foreign shipping company**.
* However, if payments are made to an Indian shipping company or service provider, TDS provisions under section 194C or 194J (as applicable) might apply.
* Note: Service tax paid under reverse charge does not attract TDS deduction.
---
### Summary:
| Situation | Who pays service tax? | Mode | TDS Applicability |
| ------------------------------------------------ | ----------------------------------- | -------------------- | ----------------------------------------- |
| Indian shipping company | Shipping company (service provider) | Normal charge | May attract TDS as per contract |
| Foreign shipping company providing ocean freight | Importer/recipient in India | Reverse charge (RCM) | No TDS on freight paid to foreign company |
---
If you want, I can provide exact excerpts from the notifications or help with the latest updates too. Would you like that?
---
### 1. Who is liable to pay service tax on ocean freight?
* The liability to pay service tax on ocean freight depends on whether the service is provided by an **Indian shipping company** or a **foreign shipping company**.
* **For shipping services provided by Indian shipping companies to exporters** for carriage of goods by sea, service tax is **payable by the service provider (shipping company)**.
* However, when the shipping service is provided by a **foreign shipping company (i.e., a company not registered in India)**, the Indian importer or the recipient of service (i.e., the importer) is liable to pay service tax under the **reverse charge mechanism (RCM)**.
---
### 2. Is it payable under reverse charge method by the service receiver?
* Yes, **reverse charge applies when the shipping service provider is a foreign shipping company**.
* The **importer or recipient of the service in India** is liable to pay service tax on the freight charges.
* This was introduced by Notification No. 30/2011-ST dated 20-06-2011, where ocean freight service provided by a foreign shipping company is taxable under reverse charge.
---
### 3. Relevant notifications, circulars, case laws
* **Notification No. 30/2011-ST dated 20-06-2011**: Imposed service tax on ocean freight services provided by foreign shipping companies under reverse charge.
* **Circular No. 138/9/2011-ST dated 20-6-2011** clarifies the applicability of reverse charge on ocean freight.
* Also refer to **Section 68(2) of the Finance Act, 1994**, relating to reverse charge.
---
### 4. Does ocean freight attract TDS?
* As per the Income Tax Act, **TDS (Tax Deducted at Source) is not applicable on freight charges paid to a foreign shipping company**.
* However, if payments are made to an Indian shipping company or service provider, TDS provisions under section 194C or 194J (as applicable) might apply.
* Note: Service tax paid under reverse charge does not attract TDS deduction.
---
### Summary:
| Situation | Who pays service tax? | Mode | TDS Applicability |
| ------------------------------------------------ | ----------------------------------- | -------------------- | ----------------------------------------- |
| Indian shipping company | Shipping company (service provider) | Normal charge | May attract TDS as per contract |
| Foreign shipping company providing ocean freight | Importer/recipient in India | Reverse charge (RCM) | No TDS on freight paid to foreign company |
---
If you want, I can provide exact excerpts from the notifications or help with the latest updates too. Would you like that?
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