Dear Tarun, as per Section 66B (Charging Section), Service tax is applicable on Taxable services provided by one person to another in taxable territory excluding services specified in Negative List.
Further, Service Tax is not payable on services specified under Mega Exemption Notification. It is clear that your Service is neither covered under Negative List nor under Exemption Notification.
Therefore, analyzing the term "Service" as defined by the Act shall answer your query.
Service means ANY ACTIVITY carried out BY A PERSON TO ANOTHER for CONSIDERATION, and includes a Declared Services.(there are specific exclusions which is not applicable to your case)
If the activity provided by the assessee satisfies above conditions, service tax is payable.
By analyzing each element of the term Service with regard to the nature of service provided by the Assessee, we can infer the following:
1. "Any Activity"- Activity means an act done, a work done, a deed done, an operation carried out, execution of an act, provision of a facility etc. Facilitating provision of services between 2 parities ( Ship owner and Cargo owner), providing information through emails, drafting of agreement can be called as "An Activity".
2. "By a person to another"- There should be two distinct person for any activity to be taxed. That is there should be a Service Receiver distinct from Service Provider. In your case, your assessee is the Service Provider and the Ship owner is the Service Receiver (both are two distinct persons).
3. "For Consideration"- the assessee receives Brokerage as a consideration for the activities carried on by him.
As the activity carried on by the assessee satisfies all ingredients of the term "Service" and also considering the fact that the service of the assesse is not covered either under Negative List or Exemption Notification, in my opinion, he is liable to pay service tax on the brokerage amount received.
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