Advocate & Tax Consultant
LOGISTICS - STORAGE
Storage and warehousing were
subjected to tax from 16.08.2002.
Includes storage of liquids and gases.
Does not include storage of agricultural
produce and cold storage services.
Services to be provided is also taxable
LOGISTICS - STORAGE
Indian ship availing storage services
abroad which are also consumed
abroad are exempted (Notification
Board has clarified that
handling/storage and warehousing of
empty containers would also be covered
as they are goods.
LOGISTICS – C&F
Persons engaged in providing services directly or
indirectly connected with C&F operations are
As per definition consignment agents are included.
However, the definition of taxable service refers to
Number of decisions to the effect that mere
consignment agents and mere commission agents
cannot be taxed under this category. (mere
commission agents are liable under business auxiliary
Reimbursement of expenses.
LOGISTICS - GTA
Services provided to a customer by a goods
transport agency in relation to transport of
goods by road in a goods carriage is covered.
With effect from 01.01.2005 liability on the
consignor or the consignee falling under
Where the consignor or consignee falls under
the specific categories, GTA is not at all liable.
Where freight is payable by consignee when
it is on to pay basis, consignee is liable.
LOGISTICS - GTA
Lot of confusion in the Industry with some
GTAs paying service tax by themselves.
Concept of GTO / GTA.
Tax is on 25% of the freight amount provided
the GTA does not avail cenvat credit on
inputs or capital goods or exemption in
respect of materials.
Issue of consignment note.
LOGISTICS – STEAMER
Services in connection ship’s husbandry,
dispatch, administrative work, booking
cargo, container feeder services on
behalf of a shipping line covered.
Commission received from shipping line
for freight forwarding (whether
business auxiliary service ?)
LOGISTICS – CUSTOMS
Services provided in relation to entry or
departure of conveyances / import or export
of goods covered.
Expenses on behalf of clients not taxable and
only agency commission is taxable.
Where breakup is not available 15% of
lumpsum amount can be considered as
LOGISTICS – CARGO
Scope includes loading, unloading, packing,
unpacking, cargo handling services for freight
in special containers or for non-containerized
freight, services of a container freight
Handling of export cargo, passenger baggage
and mere transportation excluded from levy.
As per clarification cost of transportation
shown separately is excluded.
Cargo handling in relation to agricultural
produce and cold storage exempted.
LOGISTICS - OVERLAPPING
Overlapping of services such as clearing
and forwarding agents, cargo handling
agencies, goods transport agencies,
customs house agents, port services,
storage and warehousing services.
Definition create complications and
Gross Vs. Nett issue.
OVERLAPPING OF SERVICES
Storage and C&F / Cargo Handling P
LOGISTICS – AIR
Air cargo services attract service tax.
Exemption in respect of transport of
export cargo by aircraft.
Exemption not available for the
period 14.03.2005 to 14.07.2005.
Services provided by Airports attracts
tax from 10.09.2004.
Recent DGST order
Ztore Inc provides warehousing
services to Ganesh & Co. in US for
onward delivery to customers in US.
Ztore Inc has established a business or
has a fixed establishment from which
service is provided or to be provided or
has its permanent address or
usual place of residence in USA.
Such service is received or to be received by
Ganesh & Co. who has its place of
business, fixed establishment,
permanent address, or as the case may
be usual place of residence in India.
Such service shall be deemed to be a
Ganesh & Co. will have to register as a
warehouse service provider and pay service
tax on monies paid to Ztore Inc.
Section 64 which is a charging Section
provides that this chapter extends to be
whole of India except the State of
Jammu & Kashmir.
Rule 2(1)(d)(iv) prior to 16.06.2005 read as
“in relation to any taxable service provided
by a person who is a non-resident or is from
outside India, does not have any office in
India, the person receiving taxable
service in India.”
Rule 2(1)(d)(iv) w.e.f. 16.06.2005 reads as under:
“In relation to any taxable service provided or to be
provided by a person who has established a
business or has a fixed establishment from which
the service is provided or to be provided, or has his
permanent address or usual place of residence, in a
country other than India and such service provider
does not have any office in India, the person who
receives such service and has his place of
business, fixed establishment, permanent
address or as the case may be, usual place of
residence in India.”
Whether “and” indicates satisfaction of
two conditions or “and” indicates that
service must be received in India.
Section 9 of Income Tax Act, has a
nexus to activities or assets or
permanent establishment etc. in India.
Notification 25/2005 w.e.f. 16.06.2005
exempts taxable service provided to an
individual by a service provider, where the
taxable services are received and
consumed outside India, by such
individual, not in the course or
furtherance of commerce or industry or
any other business from the whole of
Legislative intention to provide extended
territorial jurisdiction without nexus to India.
Notification 22/2005 w.e.f. 16.06.2005
provides for exemption in respect of taxable
services falling under customs house agents,
steamer agents, C&F agents, port, cargo
handling, storage, repair and maintenance,
technical inspection, etc. provided by a
non-resident person outside India and
consumed outside India in the course
of sailing of a ship.
Indian company appointing an agent
for sales promotion in the UK.
Indian company engaging a
management consultant in US.
Branch in New York engaging an
architect for constructing a building in
Construction company engaging an
engineer in China for work at site in
Branch in Germany booking air tickets
through an agent in Germany for
employee travel to London.
Project office director stationed in
France getting his car serviced in
Banking services availed in a foreign
Laison office in Japan having an
internet service provider in Japan.
IT company in India enrolling all its
senior managers working in US at a
fitness centre in US.
Pre-shipment inspection carried out by
foreign agencies prior to import.
List is endless ………
Can an Indian law impose tax on a
transaction between two parties
completely outside India when there is
no nexus to India ?
Advocate & Tax Consultant
Flat No.3, First Floor,
No.9, Thanikachalam Road,
T. Nagar, Chennai - 600 017.
E-mail : firstname.lastname@example.org