Service tax on ocean freight

IN CASE OF EXPORT

As per section 65B(44) the Definition of service is given below-

Any activity carried out by a person for another for consideration, and includes a declared service.

So Transportation of goods by vessel is a service as per above section.

But as per Place of Provission  Rules 2012,

Place of provision of goods transportation services.-

The place of provision of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of the goods:

 Provided that the place of provision of services of goods transportation agency shall be the location of the person liable to pay  tax.

In case of export destination always come in to non taxable territory hence Service Tax on Ocean Freight shall  not be charged.

IN CASE OF IMPORT

Service Tax shall be charged on the amount of Ocaen Freight.

Liability to pay tax

if service provider is from non taxable territory then Service receiver shall be liable to pay the amont of service asin Reverse Charge Machenisim.

if service provider is from taxable territory then service provider shall be liable to pay service tax.