Service tax applicability

The Consingment bills raised by the transporter are in the name of the company will then the C&F will not hav to pay the service tax. 

The limit i.e threshold limit for taxability in terms of service tax does not apply in case of REVERSE CHARGE..

It has been stated in threshold notification itself, wherein it has clearly been said that the threshold exemption will not apply in two case .First in the case where services provided bears a brand with it and the second when service tax is paid by a person other than the service provider, the case covered under 68(2) of the Finance Act,1994. Clearly, the threshold exemption will not be available or ,better to say, not applicable in reverse charge issue.

The relevant judgement which clearly states the fact:-

CESTAT, South Zonal Bench, Bangalore in the case of Nazeer & Co. Versus Commissioner of Central Excise, Kochi, 2008-TIOL-2384-CESTAT-BANG where in it was held as follows.

“…For the services rendered as C & F agents, they are receiving remuneration from its Principal. The appellants are also meeting certain expenses like, freight, courier charges (postage), transportation charges, telephone charges, loading & unloading charges, etc. on behalf of the Principal. The Principal, on actual basis, on submission of bills, reimburses these expenses. In the case of freight, bills are issued by the transporting companies in the name of the Principal. In the case of telephone, the phone itself is in the name of the Principal. Similarly the bills issued by the courier are in the name of the Principal. It was urged that for convenience, the appellants are paying the bills at the first instance, which are subsequently reimbursed by the Principal on actual basis.

Apart from the service charges, the appellants were getting reimbursement of all the expenses paid for by it on behalf of the Principal.

….if certain amounts are spent by the C & F agent on behalf of the Principal and later they are reimbursed then such amount would not be liable for service tax.”

Since some of the above expenses were incurred in the name of the Principal, it appears the decision rendered above holds good for the ‘pure agent'.