I have a query Regarding the Payment of Service tax when Custom duty is paid on the CIF Value!!!!!!!!
1. Background
X Ltd had placed a Purchase Order [PO] on M/s XYZ, Korea [Hyundai] for importation of Generator Transformer [GT] for US$ 3,100,000 on FOB basis.
The PO also states that at an additional cost of US$ 407,000, X Ltd can convert the delivery on CIF basis at Hazira Port. The said conversion from FOB to CIF shall be on subsequent confirmation in writing by X Ltd to M/s XYZ.
GT was imported into India and X Ltd had paid Customs duty on total value of US$ 3,507,000.
2. Query:
· Since the Custom duty has been paid on full value of US$ 3,507,000, it is our understanding that service tax is not payable on the subsequently confirmed additional CIF portion of US$ 407,000
CAclubindia
