Service tax on Air Freight

Service Tax (Legacy) 3527 views 2 replies

Hi,

Whether Import Freight charges ( Air transportation & ocean transportation) from overseas to India Liable for Service tax ?

If yes, Who is liable to pay service tax ? (service provider or service receiver ?)

Under which head of Service, it is taxable ?

Please advice .

Best regards,

Saju Madhavan.

Replies (2)

Yes. It's liable to Service tax

If the service provider is located in India , he is liable to pay service tax whether he has charged in the invoice or not , else service receiver .

It is taxable under the Import of taxable service head.

Hopes your query is clarified.

Best regards,

Suresh Kannan

Depends. If you import Goods on CIF India Basis, your supplier is paying the freight and insurance at his port and you pay the duty on CIF value. There is no question of service tax in this case.

Now the problem starts of FOB or Ex Work Price + Freight. If you are paying the entire transportation charges by any of these modes / multimodal transportation, you will have to pay the service tax to the agent collecting these dues here. If you arrange marine insurance yourself in India then you have to pay the service tax to insurer.If you separately pay the multimodal or any individual mode freight to someone abroad or even arrange for insurance abroad, you have to pay service tax yourself on reverse charge mechanism as import of service.

Therefore negotiate harder and ensure that you get a price that is CIF India and B/L shows freight prepaid without amount mentioned on it. Then you have no hassles.


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