SERVICE TAX ON OCEAN FREIGHT

Ocean freight as such is not liable for ST as on date. Under valuation rules the reimbursements are includible in the value of service unless incurred as apure agent as set out in Rule 5(2). Main issue could be the adding of margins ot the amount incurred.

The valuation rules appears to be ultravires the valuation section 67 which talks about amounts collected for such services. [ we assume that is taxable services] 

Service tax unfortunately in on the gross amount. The fact that profit is earned may lead to dept denying the claim of reimbursement. However the same as emntioned earlier is chalengable,.

ocean freight in service tax