Service tax on sale of service to exporter
This query is : Resolved
Guest
Guest
(Querist)
21 September 2013
Dear Sir
A is a cargo carrier company. It is providing cargo handling service to an exporter company B (exporter also is a cargo handling service provider) within India only. Is there any abatement on service tax which is to be charged by A from B.
In my case A is charging service tax @ 3.09%. Is it correct. Please give some legal support for the answer.
Please reply as soon as possible.
A is a cargo carrier company. It is providing cargo handling service to an exporter company B (exporter also is a cargo handling service provider) within India only. Is there any abatement on service tax which is to be charged by A from B.
In my case A is charging service tax @ 3.09%. Is it correct. Please give some legal support for the answer.
Please reply as soon as possible.
Guest
Guest
(Querist)
22 September 2013
somebody please reply.
24 July 2025
Got it! Here’s the breakdown for your query on **service tax on cargo handling services provided to an exporter within India**:
---
### Key points:
* Cargo handling services fall under **“Goods Transport Agency (GTA)”** or related services depending on specifics.
* For exporters, **service tax is exempt on services directly related to export** of goods (like customs clearance, cargo handling related to export).
* However, the exemption applies **only if the service is provided for export of goods out of India**.
* If service is provided *within India* and the service receiver is an exporter but the service itself is not directly linked to export, normal service tax applies.
* Regarding abatement (i.e., reduced taxable value), certain services like GTA get abatement (like 70% abatement so tax charged only on 30% of value).
---
### About the 3.09% service tax rate:
* This was the effective service tax rate during some period when the **service tax rate was 12.36%** including education cess etc.
* Abatement on GTA services was 70%, so taxable value = 30% of gross amount.
* Therefore, **service tax = 12.36% × 30% = approx 3.71%** on gross value.
* If your rate is 3.09%, that might be due to a different cess rate or a lower service tax rate at that time.
---
### Legal references:
* Notification No. 26/2012-ST dated 20 June 2012 — provides exemption to services related to export of goods.
* Notification No. 30/2012-ST dated 20 June 2012 — specifies abatement on GTA services.
* Section 66B of Finance Act, 1994 — levy of service tax.
* Relevant CBEC circulars clarifying abatement and exemption for exporters.
---
### Summary:
* If cargo handling service is directly for export, **exempt from service tax**.
* If not directly related to export, service tax applies with **abatement (usually 70%)**.
* The rate of \~3.09% is roughly consistent with abatement on 12.36% tax rate.
---
If you want, I can help you draft the exact calculation or share the notification text. Would you like that?
---
### Key points:
* Cargo handling services fall under **“Goods Transport Agency (GTA)”** or related services depending on specifics.
* For exporters, **service tax is exempt on services directly related to export** of goods (like customs clearance, cargo handling related to export).
* However, the exemption applies **only if the service is provided for export of goods out of India**.
* If service is provided *within India* and the service receiver is an exporter but the service itself is not directly linked to export, normal service tax applies.
* Regarding abatement (i.e., reduced taxable value), certain services like GTA get abatement (like 70% abatement so tax charged only on 30% of value).
---
### About the 3.09% service tax rate:
* This was the effective service tax rate during some period when the **service tax rate was 12.36%** including education cess etc.
* Abatement on GTA services was 70%, so taxable value = 30% of gross amount.
* Therefore, **service tax = 12.36% × 30% = approx 3.71%** on gross value.
* If your rate is 3.09%, that might be due to a different cess rate or a lower service tax rate at that time.
---
### Legal references:
* Notification No. 26/2012-ST dated 20 June 2012 — provides exemption to services related to export of goods.
* Notification No. 30/2012-ST dated 20 June 2012 — specifies abatement on GTA services.
* Section 66B of Finance Act, 1994 — levy of service tax.
* Relevant CBEC circulars clarifying abatement and exemption for exporters.
---
### Summary:
* If cargo handling service is directly for export, **exempt from service tax**.
* If not directly related to export, service tax applies with **abatement (usually 70%)**.
* The rate of \~3.09% is roughly consistent with abatement on 12.36% tax rate.
---
If you want, I can help you draft the exact calculation or share the notification text. Would you like that?
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