Nirav (Accountant) (595 Points)
01 July 2016Hello,
We have exported some goods after 01 June 2016. We have received a shipping bill and on it Ocean Freight has been charged.
But Service tax is not charged on Ocean Freight amount.
My query is Is service tax applicable on Ocean Freight?? If yes, then who is liable to pay service tax?? Service Receiver or Service Provider??
Same way for import, who is liable to pay service tax on Ocean Freight for Import of goods??
CA FARHAT MIYAN
(CA)
(40 Points)
Replied 02 July 2016
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,
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.
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