Clarification on Service tax
on freight charges
TRADE NOTICE NO: 5/2008, DATED 5-2-2008
A Copy of Board’s letter
F.No: 137/131/2007 Cx-4 dated 12-12-2007 issued by the Government of India,
Ministry of Finance, Department of Revenue, New Delhi is communicated herewith
for information, guidance and necessary action.
2. The contents of the above said letter may be brought to the notice of all the constituent members of your Trade Association.
Postal Department
has engaged shipping companies for conveyance of outwards surface Indian Postal
Mails to various ports of foreign countries and handling of export cargo or
passenger baggage etc., From the facts mentioned it appears that the service
provided by shipping companies is in the nature of ‘distribution, management
and logistics’ and delivery order charges and inland haulage charges collected
by shipping companies are for such ‘distribution, management and logistics’
service. Such service is specifically covered under ‘business support services’
and is liable to service tax.