service tax on ocean freight / air freight

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Nitish

Nitish (Querist)
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14 July 2009 is service tax applicable on ocean freight / air freight?

SIDDHARTHA SANKAR ROY

SIDDHARTHA SANKAR ROY (Expert)
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14 July 2009 Transport of goods by air is taxable service w.e.f 10.09.2004.Any service provided or to be provided to any person, by a aircraft operator, in relation to transport of goods by aircraft is taxable.So freight collected by aircraft operators are taxable.

In this years budget,transport of Coastal goods (as defined under the Customs Act) and transport of goods through National Waterways, and inland waters have been proposed to be brought under tax net which will become taxable on enactment of the finance bill.Once it is notified, freight collected for transport of such goods will attract service tax . Abatements will definitely be given to specific sectors which we will only be able to know in future.

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Nitish

Nitish (Querist)
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15 July 2009 Thanks for the clarifications. i would like to inform you that i am working in a freight forwarding company & there are so much confusion in service tax matters. like below:
1/ for the export shipments on ex works basis. would there be service tax applicable on overseas services like transportation, packing etc?
2/ if we are billing out of india for any export shipment & getting paid in foreign currency, is this anywhere linked regarding service tax issue?
3/ for the import shipment any overseas service is applicable for service tax?

CA.Hanumantha Reddy

CA.Hanumantha Reddy (Expert)
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15 July 2009 : For query 1 & 2 transport of export goods are exempted by vide notification No. 29/2005 dtd 15.07.2005. For query 3- to treat as an import, it should be performed in India wholly or partly. If fulfill the above condition then your liable for Service tax under reverse charge mechanism.

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