Service Tax on Shipping Company Bill.
This query is : Resolved
13 September 2016
A Chinese CHA has issued us a shipping invoice for shipping goods from China to India. They do no have any office in India
Will RCM be applicable.
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Arun Kumar Singh
(Expert)
13 September 2016
yes, you need to pay service tax on it. Any taxable services taken in taxable territory from non-taxable territory then service recipient are liable to pay service tax.
Message likes :
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14 September 2016
As this is a bill for Shipping the goods from China to India, is there any exemption available or do we have to pay service tax on full 15%.
24 July 2025
Here's the situation regarding **service tax on shipping services from a foreign CHA (Customs House Agent)** with no Indian presence:
---
### 1. **Is Reverse Charge Mechanism (RCM) applicable?**
Yes.
* When you take a taxable service from a service provider located outside India (no Indian presence), and the place of service is in India, **the service recipient (you) is liable to pay service tax under RCM**.
---
### 2. **Is shipping service taxable and at what rate?**
* **Shipping services related to international goods transportation are generally exempt from service tax in India**.
* However, **Customs House Agent (CHA) services** (clearing and forwarding agent services) are **taxable under service tax**, and if provided by a foreign CHA without Indian presence, the recipient pays under RCM.
---
### 3. **Exemptions or special rates?**
* If the invoice is purely for **transportation of goods by sea or air from outside India to India**, **the transportation service itself is exempt** from service tax.
* If the invoice is for **CHA services (customs clearance, documentation, etc.)**, those services are taxable at the standard rate (which used to be 15%, later revised to 14%, 14.5%, and now subsumed under GST, but for the context, 15% was applicable).
* So, **on pure shipping/transportation service, no service tax**.
* On CHA services, **service tax @15% is payable on RCM basis**.
---
### **Summary for your case:**
* If the bill is purely **shipping/transportation charges from China to India**, **service tax is exempt** → no tax to be paid.
* If the bill includes **CHA or other taxable services** (like documentation, customs clearance, etc.), then **service tax @15% under reverse charge is payable** by you.
---
Would you be able to share the invoice details or the description of services billed? That would help in confirming the applicability more precisely.
---
### 1. **Is Reverse Charge Mechanism (RCM) applicable?**
Yes.
* When you take a taxable service from a service provider located outside India (no Indian presence), and the place of service is in India, **the service recipient (you) is liable to pay service tax under RCM**.
---
### 2. **Is shipping service taxable and at what rate?**
* **Shipping services related to international goods transportation are generally exempt from service tax in India**.
* However, **Customs House Agent (CHA) services** (clearing and forwarding agent services) are **taxable under service tax**, and if provided by a foreign CHA without Indian presence, the recipient pays under RCM.
---
### 3. **Exemptions or special rates?**
* If the invoice is purely for **transportation of goods by sea or air from outside India to India**, **the transportation service itself is exempt** from service tax.
* If the invoice is for **CHA services (customs clearance, documentation, etc.)**, those services are taxable at the standard rate (which used to be 15%, later revised to 14%, 14.5%, and now subsumed under GST, but for the context, 15% was applicable).
* So, **on pure shipping/transportation service, no service tax**.
* On CHA services, **service tax @15% is payable on RCM basis**.
---
### **Summary for your case:**
* If the bill is purely **shipping/transportation charges from China to India**, **service tax is exempt** → no tax to be paid.
* If the bill includes **CHA or other taxable services** (like documentation, customs clearance, etc.), then **service tax @15% under reverse charge is payable** by you.
---
Would you be able to share the invoice details or the description of services billed? That would help in confirming the applicability more precisely.
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