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September 2016

Service Tax on Freight Forwarders on transportation of goods from India :

By Tarun Ghia
Pratik Mehta
Brijesh Cholera
Chartered Accountants
Reading Time 1 mins
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SERVICE TAX UPDATES

Circular No. 197/7/2016-ST dated 12 08 2016

CBEC has issued this Circular to clarify doubts about “Service Tax liability of Freight Forwarders collecting “Freight”, for shipments moving from Indian Port to any place outside India”.

CBEC has clarified that as per Rule 10 of Place of Provision of Services (POPS) Rules 2012, since destination of the services is outside India, and the freight forwarder is acting as “Principal” therefore, the transaction will not attract Service tax.

CBEC has further clarified that as per Rule 2(f) read with Rule 9 of POPS Rules 2012, if the freight forwarder is acting as pure agent, then services of the freight forwarder will be taxable..

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