Therefore, on the basis of the previous judgment, no service tax can be levied on sea freight, provided that that service is provided before importation, forms part of the import activity and is subject to customs duties. There is therefore uncertainty as to the validity of the current collection of the service tax on sea freight. Section 66D (p)(ii) of the Finance Act, 1994 deals with the carriage of goods by sea and air from a point outside India to the customs clearance post in India. Following the removal of the said entry from the negative list, an exemption will only be granted for the carriage of goods by air from a point outside India to the customs clearance post in India. Therefore, only services provided by aircraft are exempted after 01.06.2016 (entry 53 of Communication No 25/2012-ST of 20.06.2012). Therefore, the services supplied by the ship are subject to the service tax, since the exemption applies only to air transport. The tax on services on sea freight applies from 01.06.2016. As this is a new levy, we have compiled a list of frequently asked questions to prepare for this levy and pay the appropriate taxes without receiving interest and penalties at a later date. Therefore, we ask that you review the following FAQ and comply with this new submission. FAQ 4: If a service tax is levied on sea freight, the service provider calculates and collects it from the recipient of the service. Why should the recipient be aware of this charge? Has.
Freight transport services by ship from a point outside India to the customs clearance post in India are covered by entry (p)(ii) of Section 66D of the Finance Act, 1994. Since these services are included in the negative list, there is no service tax on this activity. FAQ 2: If the service falls into the negative list, why will a service tax be levied on these transactions from 01.06.2016? FAQ 12: I transferred an advance to the foreign maritime service provider for the services it will provide after 01.06.2016. He sent me an invoice for the services to be provided on 13.06.2016. I am a person responsible for paying the service tax on reverse charge freight. In this case, is the service tax due on the advance paid before 01.06.2016? FAQ 10: I am a manufacturer/service provider who pays service tax on reverse charge sea freight. What is the due date for payment of this tax? FAQ 8: Does the service tax have to be paid on the full amount of freight or is a discount indicated? As stated in FAQ 4, the customer (the manufacturer) only pays service tax if the consumption of the service is taxable, if the supplier`s place is a non-tax jurisdiction and if the customer`s place is a tax jurisdiction. In this case, an invoice was issued by the service provider before 13.01.2016, i.e. within 14 days from 01.04.2016, so that there is no tax incidence on such an advance paid before 01.06.2016.
Normally, the service provider is the person responsible for paying the tax under section 68(1) of the Finance Act 1994. However, if the services are consumed in the tax territory and the supplier`s place is a non-taxable territory and the customer`s place is a tax territory according to the place of aggregation, customs duties and taxes on the services must be paid on the transportation costs under the law in force at the time of this document. As stated in the response to FAQ 5, an obligation of the beneficiary of the service only exists if all three conditions are met cumulatively. In the present case, the establishment of the service provider in India, which is a taxable territory (since the shipping company is an Indian company), is denied one of the conditions and, therefore, there is no liability to the recipient of the service. Therefore, the service provider that is the dispatcher must collect the service tax and collect it from the recipient. Since the goods are destined from China to India, the place of consumption of the service is India (tax jurisdiction) in accordance with Rule 10 of the Place of Supply of Service Rules, 2012. In addition, the shipping company is located in China (i.e. the location of the service provider is a non-taxable territory) and the manufacturer is located in India (i.e. the location of the recipient of the service is a taxable territory). Please guide me what is the accounting code for export and import of goods by sea and air. FAQ 5: We are a manufacturer engaged in the production of excise goods. For such production, we source raw materials, inputs and other items from a seller outside India, for example in China.
We reserve the ship`s services for the transport of these goods from China to India and the cargo must be paid in US dollars to the shipping company, which is also located in China. In that case, are we obliged to pay the service tax on that cargo paid to the shipping company? According to Rule 7 of the Tax Points Rules 2011, the tax point for services subject to the reverse charge mechanism is the date of payment to the seller. However, if the payment is not made within 3 months of the invoice date, the place of taxation is the date immediately following this 3-month period. 25.07.2016, then the service tax is due until 06.08.2016. However, if payment is made on FAQ 13, is the service tax paid on ocean freight eligible as an advance payment for the manufacturer or service provider? FAQ 7: Normally, the cargo incurred when importing the goods is included in the value of the goods when calculating duties. Therefore, from 01.06.2016, two taxes will be levied on transport costs, namely customs duties and services tax. Please specify.? Since all the conditions are met, the manufacturer must pay a service tax on this sea freight to the central government. FAQ 1: In the introductory paragraph, it was stated that the tax on maritime freight services is a new levy. How much is the tax liability of such a turnover until 31.05.2016? Assuming that the service tax is payable (wisely provided in United Shippers Limited) since the service tax is paid, can transportation costs be excluded for the purposes of paying the fee? The answer would be no, because there is no exception in that regard. Circular TRU F No. 334/8/2016-TRU of 29.02.2016 clarified that the service tax paid on this freight is not part of the assessment of customs duties, but did not indicate that customs duties on these transport costs are not payable.