Service tax applicability

Please refer to Point F (2) in the link below. The same is produced below:

"Section 65(23) which defines cargo handling service is being amended so as to include services of packing together with transportation of cargo or goods, with or without one or more other services like loading, unloading, unpacking, under cargo handling service. With this amendment, packing with transportation will be classifiable under cargo handling service only."

Hence it seems that where transportation will be classifiable under cargo handling service only, same would be chargeable to Service Tax also, being a part of taxable value of Service. If any tax has been paid on freight as service tax on input service, credit of same may also be taken.

Please wait for other opinions too.

Dear Prabhat Sir,

Thanks for your advise. WHILE SEARCHING FOR THE NOTIFICATION ON NET I GOT A NOTIFICATION HAVING NO.F.NO.B.11/1/2002-TRU DATE 1ST AUGUST 2002

WHICH SAYS THAT IF THE COST OF TRANSPORTATION IS SHOWN SEPARATELY IN THE BILL RAISED,WILL BE EXCLUDED FROM THE LEVY OF SERVICE TAX. IF THE COST OF TRANSPORTATION IS CLAIMED ON ACTUAL BASIS,THEN IT WILL NOT BE INCLUDABLE IN THE TAXABLE VALUE OF CARGO HANDLING SERVICES.

THIS IS FOR YOUR KIND INFORMATION
 

Mr. Sameer,

I went through the above Instructions issued vide F.No.B.11/1/2002-TRU. These instructions were issued in 2002, i.e., before introduction of service tax on transport of goods by road, air & other modes. Before this goods transport operators were covered under the service tax net, but the same was continuously under disputes until finally Transport of goods by road service was introduced.

I would like to bring to your notice D.O. F. No.334/1/2008-TRU dated 29.02.2008, wherein the definition of Cargo Handling service was amended in Finance Bill, 2008. The same is produced below:

"5.2.2 Section 65(23) which defines cargo handling service is being amended so as to include services of packing together with transportation of cargo or goods, with or without one or more other services like loading, unloading, unpacking, under cargo handling service. With this amendment, packing with transportation will be classifiable under cargo handling service only."

Hence, it seems that the new amendment supersedes instructions issued prior to Finance Bill, 2008.

D.O. F. No.334/1/2008-TRU dated 29.02.2008 is attached below for reference:

THANKS PRABHAT SIR......