Service tax on foreign vessels plying between indian ports

Others 1323 views 2 replies

m r gopal

ASSTT GEN MGR(FIN & ACCTS)

51 Points Joined July 2010

Transportation of material between Indian ports through foreign vessels – specific performance

a) We are considering transporting raw material from one Indian seaport to another Indian seaport, sometimes through a foreign vessel, chartered through the ministry of shipping, for a specific voyage.
b) The entire transaction is conducted through the brokers of the shipowner who also signs the fixture note, charter agreement on behalf of the shipowners.
c) An order u/s 163 of IT Act 1961 is issued recognizing a firm/person to be treated as agents to the master of ship and also non-resident shipping company for the specific voyage and a port clearance certificate is issued, after requisite income tax has been made and the agents are issued notice u/s 172 of IT act 1961 calling for various documents alongwith the return to be filed u/s 172(3).
d) The freight remittance is made to the shipowner who is an NRI.

Our question is whether service tax on the freight is to be borne by us or the invoice has to be raised by the broker/agent who has signed the fixture note etc.

whether sec 66A and sec 92) of Sec 68 applicable.

Replies (2)

Ajit kumar Dubey

Taxation Manager

637 Points Joined September 2008

In relation to service tax as per the notification no 30/2012 dtd 20-06-2012, taxable value for transportation of goods in a vessel is liable to be taxed @ 50% of the value of the freight and to be paid by the service provider. Also it is important to note that when transportation of goods is by way of inland waterways it is exempt under mega notification and negative list also.

Sushma Mevacha

Executive

394 Points Joined July 2009

Inland Waterways / Transportation by Vessel is exempted for the Specified items as discribed in Clause 20 of Notification 25/2012 - ST Dated : 20/06/2012

" 20. Services by way of transportation by rail or a vessel from one place in India to another of the following goods -

(a) petroleum and petroleum products falling under Chapter heading 2710 and 2711 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);

(b) relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap;

(d) postal mail or mail bags;

(e) household effects;

(f) newspaper or magazines registered with the Registrar of Newspapers;

(g) railway equipments or materials;

(h) agricultural produce;

(i) foodstuff including flours, tea, coffee, jaggery, sugar, milk products, salt and edible oil, excluding alcoholic beverages; or

(j) chemical fertilizer and oilcakes; "