Courier
services were brought under the Service Tax net by the Finance (No. 2) Act,
1996 w.e.f. 1-11-1996 vide Notification No. 6/96, dated 31-10-1996.
The service shall be taxed, if provided by a courier agency to customers.
Rate of Service Tax: The rate
of service tax is specified in section 66 of the Act. The Finance (No. 2) Act,
2004 has substituted the charging section 66, and the rate of service tax is
enhanced from 8% to 10% ad valorem. The increase in tax rate has come into
force from the date of enactment of the Finance (No. 2) Act, 2004 Le. 10 9-2004.
Further, the Finance (No. 2) Act, 2004, w.e.f. 10-9-2004 has also
levied an education cess @ 2 % of the service tax. The cess paid on inputs
services shall be available as credit for payment of cess on output services.
For further discussion in this regard, refer to -'Payment of Service Tax'.
The term courier service has not been defined under the Act. It should be understood in the context of its commonly understood meaning and scope. The term 'courier' means 'Messenger carrying documents' (reference the Oxford Mini Dictionary). In the present context, the courier service will fall under the ambit of service tax if it relates to
§
door-to-door transportation;
§
transportation of time-sensitive documents, goods or
articles.
(1) 'door-to-door transportation'
In courier
services, the service provider renders the services door-to-door
which signifies that the documents etc. are collected by the service provider
from the door of the customers and delivered at the door of the addressee. The
distance doesn't -matter in case of courier services. However, it may be
noted that though service provider ordinarily pick and deliver the documents at
the door of the customer and addressee respectively but if a customer prefers
to deliver the documents at the office of courier agency or an addressee takes
delivery of his documents from the office of the courier agency it will not
change or alter the nature of service. In the context of service tax, it will
remain a courier service and will be charged for tax.
(2) 'time-sensitive'
A service
is taxable if it is in relation to 'time-sensitive' documents, goods or
articles. The words 'time-sensitive' signifies that service of the courier
agency is availed for the faster and quick delivery of documents. Therefore, in
the present context, the service of a courier agency should be faster as
compared to the ordinary mode of sending the documents etc. and whenever a
customer utilizes the service of a courier agency, it should be deemed that it
is only for 'time-sensitive' documents etc.
(3) 'documents'
The word
'document' means 'piece of paper giving information or evidence' (reference the
Oxford Mini Dictionary). The word 'document' has been defined as
"'document' shall include any matter written, expressed or described upon
any substance by means of letters, figures or 'marks, or by. more than one of
those means which is intended to be used, or which may be used, for the purpose
of recording that matter" [clause (18) of section 3 of The General Clauses
Act, 1897]. Thus, in the context of this service, the 'document' should not be
construed in a limited sense like title deed etc. which is used for the purpose
of the evidence. It should be understood in its commonly understood meaning and
scope.
(4) 'goods' or 'articles'
"goods means every kind of moveable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale" [section 2(7) of Sales of Goods Act, 1930] In the present context of service tax, the 'goods' refers to all moveable property that may be medicines, gifts etc. The term 'article' is used in the sense analogous to the term 'goods'. There is no significant difference between the 'goods' and 'articles'.
The
definition of taxable services provided by a courier agency has been given
under sub-clause 0 of clause (105) of section 65. That is:
any
service provided "to a customer, by a courier agency in relation to door-to
door
transportation of time-sensitive documents, goods or articles".
(1) Speed
Post services are taxable services
No, the
Government has clarified in its Circular F. No. 341/43/96-TRU, dated 31-10-1996
(appended as Annexure 1) that 'the Speed Post services provided by the
department of post do not attract the service tax'.
(2) Additional
facilities undertaken by the 'courier agency' are taxable service
Yes,
Government has clarified in its Circular F. No. 341/43/96-TRU, dated 31-10-1996
(appended as Annexure I) that some 'courier agencies' undertake comprehensive
business and provide integrated transportation, warehousing, packing, inventory
management, etc, if these facilities are relatable to door-to-door
transportation, these fall under the taxable services.
Service
tax is liable to be paid when courier service is rendered by a courier agency.
(1) 'Courier
agency'
“courier
agency means a commercial concern engaged in the door-to-door
transportation of time-sensitive documents, goods or articles utilizing
the services of a person, either directly or indirectly, to carry or accompany
such documents, goods or articles" [clause (33) of section 65].
As
per the aforesaid definition, a courier agency should satisfy the following
conditions
§
it is a commercial concern;
§
it should be engaged in door-to-door
transportation of time-sensitive documents, goods or articles;
§
the services are rendered by utilizing the services of a
person, either directly or indirectly;
§
such person is to carry or accompany such documents, goods
or articles.
(2) 'commercial concerti'
The term
'commercial concern' denotes a firm or a business entity or organization,
engaged in commercial activities like sale, purchase or providing services for
consideration and having profit motive. A charitable institution cannot fall
under the category of a 'commercial concern', because it does not have profit
motive. The term 'commercial concern' in the context of service tax means the
concern engaged in providing courier services.
It is not
relevant whether such commercial concern describes itself as a ‘courier agency'
or not. What is of significance is that once the commercial activities of the
assessee concerned falls within the definition of the term courier agency' the
assessee is liable to pay the service tax on the service provided by it.
(3) 'utilizing the services of a person'
The
courier services should be rendered by utilizing the service of a 'person',
either 'directly or indirectly'. The term 'person' has not been defined in the
context of service tax. But, the term 'person' has been defined as "person
shall include any company or association or body of individuals, whether
incorporated or not" [clause (42) of section 3 of General Clauses Act,
1897]. But, in the context of this service a 'person' is natural person i.e.
human being. However, he may be a staff member of the 'courier agency' or a
hired person. The person is to carry or accompany time-sensitive
documents, goods or articles.
(4) 'directly or indirectly'
Sometimes,
it may be possible that service provider may not alone be able to execute the
work and take the help of other person or concern by employing them on sub-contract
basis for the execution of work. In this case, even if service provider gets
the part of the service done by employing the services of other person or
concern, it will be treated that services are provided by the original service
provider and tax would be charged on the entire services. For instance, a
'courier agency' may use public transport system for the transportation of
documents etc.
(5) 'Angadia' is a 'courier agency'
Yes, the
Government has clarified in its Trade Notice No. 271/68/97, dated 7-11-1997,
Commissioner of Central Excise, Nagpur (appended as Annexure II), "
'Angadia' is engaged in commercial activity - undertakes to deliver the
documents goods or articles received from customers to other end. For this
purpose, they are charging service charges from customers for the services
rendered by them. 'Angadia' are very much covered by the definition of 'courier
agency' and are liable to pay the service tax on the services provided by
them".
(6) Ordinary transporters are different from
'courier agency'
Yes, the
Government has clarified in its Circular F. No. 341/43/96-TRU, dated 31-10-1996
(appended as Annexure I) that the nature of the business of a 1courier agency'
is quite distinct from the ordinary transporters, which carry goods from one
place to another whereas 'courier agency' delivers time sensitive documents,
goods, articles.
(7) 'Express Cargo Service' transporters are
different from 'courier agency'
No, in a
point raised before the Government, it has been clarified in its Circular F.
No. 341/43/96-TRU, dated 31-10-1996 (appended as Annexure 1)
that some transporters also undertake door-to-door transportation
of goods or articles within a stipulated period and advertise themselves as 'Express
Cargo Service'. These transporters are not different from the service provided
by the conventional courier agencies. Therefore, these 'Express Cargo Service'
are covered under the ambit of service tax.
(8) Government Department is the commercial concern
No, the
Government has clarified in its Circular F. No. 341/43/96-TRU, dated 31-10-1996
(appended as Annexure 1) that "the term commercial concern' does not
include a Government department within its scope".
(9) Co-loaders are liable to pay service
tax
No, in a
point raised before the Government, where a 'courier agency' utilized the
service of another company for in-transit movement of documents etc. from
one point to another, technically, called co-loaders - whether such
coloaders are liable to pay service tax? It has been clarified in the Circular
F. No. 341/43/96-TRU, dated 31-10-1996 (appended as Annexure
1) that as such coloaders provide services to the 'courier agency' not directly
to the customers, in this case, services provided by the co-loaders to
the 'courier agency' are not chargeable to service tax.
In the
case of On Time Couriers v CCE, Kolkata-I (2003) 156 ELT 615 (Tribunal-Kolkata)
Tribunal has remanded the matter back to the original adjudicating authority to
look into the claim that the business between the two courier agencies is not
covered by the Rules and no service tax is leviable on the same.
(10) 'Courier agency' liable to pay tax on
documents etc. sent abroad
Yes, in a
questi6n raised before the Government, it has clarified in its Circular F. No.
341/43/96-TRU, dated 31-10-1996 (appended as Annexure 1) that
"the 'courier agency, is liable to pay service tax on the gross amount
charged in India from the customer even if the documents, goods or articles are
delivered abroad".
(11) 'Courier agency' liable to pay tax on documents etc. received from abroad
It has been clarified by the Government in its Circular F. No. 341/43/96TRU, dated 31-10-1996 (appended as Annexure 1) that the 'courier agency, is not liable to pay any service tax in respect of documents, goods or articles received from abroad and delivered in India provided in this respect, the customer in India is not charged any amount by the 'courier agency'.
Courier services liable to be charged to tax
Courier services
liable to be charged to service tax when provided to
§
a customer
§
in relation to door-to-door
transportation of time-sensitive documents, goods or articles.
(1) customer
Services
are liable to be charged to tax only when it is provided to ‘customer'. The
word 'customer' as per the dictionary meaning "one accustomed to frequent
a certain place of business: a buyer: a person" (reference the Chambers
English Dictionary) or "a person buying goods or services from a shop,
etc." (reference the Oxford Mini Dictionary).
As per sub-clause
(f) of clause (105) of section 65, 'a service provided by a courier agency is
taxable when provided to a customer', in this case, customer is a person who
booked the documents/ goods/ articles with the courier agency and pays for
that, the recipient of the documents/ goods/ articles is not a customer of
courier agency as he does not pay anything for the service. Therefore, when a
courier (to be sent abroad) is booked in India, the service is rendered by
courier agency to customer in India, therefore, liable to pay service tax on
the entire amount charged in India from customer. However, where a recipient of
documents/ goods/ articles in India is liable to pay any amount to the courier
agency, even if the same was booked out of India, then such recipient will also
become the customer for the courier agency, then courier agency in India will
be liable to pay service tax for the amount charged from the recipient of
documents/ goods/ articles.
Value of taxable services for charging tax
The value
of taxable services in relation to services provided by the courier agency
shall be the gross amount charged by courier agency from the customers for
services in relation to door-to-door transportation of time-sensitive
documents, goods or articles [section 67].
Explanation
1 has also been added to section 67, which provides that, for the removal of
doubt, in respect of only certain specific services, it is declared that
certain amount shall be the part of value of taxable services and certain
amount shall not be the part of the value of taxable services, but nothing has
been specified in respect of courier services.
(1) Charges for co-loaders are part of
taxable value
In a point
raised before the Government, it has been clarified in the Circular F. No.
341/43/96-TRU, dated 31-10-1996 (appended as Annexure 1) that
such co-loaders provide services to the 'courier agency' not directly to
the customers. In this case, charges by the co-loaders to the 'courier
agency' are not part of the value of taxable value. However, it may be noted
that the 'courier agency' ultimately recovers the charges in respect of co-loaders
from the customers. Therefore, such charges shall be the part of taxable value
in the hands of 'courier agency'.
In the case of On Time Couriers v CCE, Kolkata-1 (2003) 156 ELT 615 (Tribunal-Kolkata) Tribunal has remanded the matter back to the original adjudicating authority to look into the claim that the business between the two courier agencies is not covered by the Rules and no service tax is leviable on the same.
(2) Charges for additional
facilities undertaken by the 'courier agency' are part of taxable value
Yes,
Government has clarified in its Circular F. No. 341/43/96-TRU, dated 31-10-1996
(appended as Annexure 1) that some 'courier agencies' undertake comprehensive
business and provide integrated transportation, warehousing, packing, inventory
management etc. If these facilities are relatable to door-to-door
transportation, the charges for such facilities are to be included in the value
of taxable services.
Therefore,
in case of courier services, the value of taxable services shall be the gross
amount charged by the service provider for such services rendered by him
without claiming any abatements towards administrative/ office expense's
incurred for rendering such services. In other words, 'gross amount' here
indicates that no deduction shall be allowed in respect of any expenditure
incurred by the service provider which has proximate connection in rendering
the services by him. However, if the 'courier agency' has made the payment of
octroi, insurance, custom duty etc. on behalf of the customers and gets
reimbursement from the customers, these expenses should not be treated as a
part of the taxable value provided 'courier agency' have documentary evidence
in support of such expenses.
(A) Courier services provided to diplomatic
mission
The Government has exempted all the taxable services provided by the courier agency to the specified diplomatic missions or members from the whole of the service tax (vide Notification No. 44/98-ST GSR 47(E) [F. No. 137/14/97CXA], dated 22-1-1998 (appended as Annexure III in Chapter on 'Advertising Services').
(B) Genera I Exemption
The
Government has granted exemption from the whole of Service Tax in respect of
all taxable services, for services provided to United Nations or an
International Organisation. Similarly, the exemption, subject to certain
conditions, has also been granted for taxable service provided to a developer
or units of Special Economic Zone (SEZ). The Government, w.e.f. 20 November,
2003 has restored the exemption, as an interim measure, from the whole of
service tax when payment is received in convertible foreign exchange for the
taxable services rendered in India provided it was not repatriated from or sent
outside India, such exemption was earlier withdrawn w.e.f. 1-3-2003.
The reader may note that detailed discussion about aforesaid exemptions along
with relevant notifications have been given in the Chapter on 'Exemption from
whole of Service Tax - Some Cases'.
The Government in its Circular No. 21/01/97, dated 27-1-1997 (appended as Annexure III) had prescribed the procedure for registration in case of courier agency and permitted "the regional office alone may be registered and not the individual office which does not raise the bills. Similarly, if the head office of the courier agency has the centralized billing system in respect of services rendered to its clients from its branches, the head office alone may be registered". Further the Bombay High Court in the case of INI Express Worldwide Private Limited 1998 (97) ELT 406 had passed interim order that each petitioner/ courier agency/courier company shall file a single quarterly return in Form ST 3 with the officer having jurisdiction over their registered office or head office or principal place of business even if they have several regional offices/billing stations/ branches. Similarly each petitioner/ courier agency/courier company shall file single monthly Form TR 6 for deposition of all the service tax collected by all its branches/ offices. The order has further stated that there shall be single assessment for them though they may have several branches/ offices/ billing and non-billing stations. However, the reader may note that after the aforesaid circular and the case, the Service Tax Rules, 1994, have been amended w.e.f. 1610-1998 and consequently changes have also been made for registration under rule 4, filing of return under rule 7, etc. of the aforesaid Rules, which are applicable in case of all the taxable services. For detailed procedure of registration refer to the Chapter 'Registration' and 'Service Tax Return' of this book.
Decision taken at Central Advisory Council Meeting
The
extracts of the paras 104 and 105 of the minutes of the meeting of the Central
Advisory Council held on 10-1-1997 are given in Annexure IV for
reference.
N.B. The
readers may note that provisions, procedures and other related discussion
related to registration, payments of service tax, filing of return, interest
and penalty, assessment procedure, appeal, refund of tax, etc., which are same,
as applicable in respect of other taxable services, have been given in separate
Chapters of this Book.
[Circular
F. No. 341/43/96-TRU, dated 31-10-1996, relevant extracts]
11. Courier agencies. -Points
have been raised about the scope of the term “courier agency". Courier
agency has been defined to be a commercial concern engaged in the door to door
transportation of time sensitive documents, goods or articles, utilising the
services of a person, either directly or indirectly, to carry or accompany such
documents, goods or articles. It is thus to be seen that any commercial concern
engaged in the activity described above is a courier agency for the purposes of
section 85 of the Finance (No. 2) Act, 1996 and it is not relevant whether such
commercial concern describes itself as a courier agency or not. What is of
significance is that once the commercial concern falls within the definition of
the term "courier agency" it is liable to pay the service tax on the
services provided by it.
12. As regards the scope of
courier agency, the definition is quite elaborate and self-explanatory.
Moreover, courier agencies are clearly identifiable by virtue of the nature of
business performed by them in the matter of delivery of time sensitive
documents, goods or articles. The nature of their business is quite distinct
from the ordinary transporters which carry goods from one place to another
place. What distinguishes the commercial concern as courier agency from an
ordinary transporter is the service provided by it in the door to door
transportation of time sensitive documents, goods or articles.
13. It has been pointed out
that some transporters also undertake door to door transportation of goods or
articles and they have also made special arrangements for speedy transportation
and timely delivery of such goods or articles. In fact, many of them advertise
themselves as 'Express Cargo Service' giving assurance of delivery within a
stipulated time period. The nature of service thus provided by these
transporters is not different from the service provided by the conventional
courier agencies. Therefore, these express cargo services are also liable to
pay service tax.
14. It may be clarified that
only such agencies fall within the scope of the term "courier agency"
which are commercial concerns. The term "commercial concern" does not
include a Government department within its scope. Accordingly, the Speed Post
services provided by the Department of Posts do not attract service tax.
15. It has been pointed out
that in some cases one courier agency, who undertakes to deliver the documents,
goods or articles received from customers, utilises the services of another
company for in-transit movement of such documents, etc. from one point to
another. These are, technically, called coloaders. The co-loader
undertakes to transport the documents, goods or articles on behalf of the
courier agency and charges the courier agency for such services. A question has
been raised whether under these circumstances the coloaders are also liable to
pay service tax.
16. In this context, it is
clarified that co-loaders provide service to the courier agencies as
such. They do not provide directly any service to the customer who gives the
documents, goods or articles to the courier agency for their delivery to the
consignee. What is chargeable to service tax is the service provided by courier
agency to the customer. In this case, the courier agency being not a customer
as such, the service provided by co-loader to the courier agency is not
chargeable to service tax. It is significant to point out that the charges of
the coloaders to the courier agency for in-transit movement of goods,
documents or articles are in any case ultimately recovered by the courier
agency from the customer and these charges are included in the gross amount
charged by the courier agencies from customers on which the service tax is
computed.
17. As regards the value of
taxable service it is the gross amount charged by the courier agency from the
customer for services in relation to door to door transportation for time
sensitive documents, goods or articles. The service tax is, therefore, to be
computed on the gross amount charged by the courier agency from the customers.
18. A question has been
raised whether courier agency is liable to pay service tax on the
transportation of documents, goods or articles which are sent abroad. In this
context, it is clarified that the courier agency is liable to pay service tax
on the gross amount charged in India from the customer even if the documents,
goods or articles are delivered abroad. However, in respect of documents, goods
or articles which have been received from abroad and delivered to a customer in
India, the courier agency is not liable to pay any service tax provided that
the customer in India is not charged any amount for delivery of such documents,
goods or articles in India.
19. It has been represented
that some courier agencies undertake comprehensive business and provide
integrated transportation, warehousing, packing, inventory management, etc.
Doubts have been expressed whether courier agencies are liable to pay service
tax in respect of service provided in relation t6warehousing, packing,
inventory management, etc. It is clarified that where even the above facilities
are relatable to door to door transportation and are undertaken by the courier
agencies themselves, the charges for such facilities are also includible in the
gross amount and service tax collected accordingly.
Service Tax on courier service -
Angadia service
[M.F.
(D.R.) letter issued under F. No. 168/1/96-CX.4, dated 10-10-1997
and Commissioner of Central Excise Nagpur, Trade Notice No, 271/68/97, dated 7-11-1997]
Attention
of Trade is invited towards this Commissionerate Trade Notice No. 191/67/96,
dated 9-12-1996 regarding imposition of Service Tax on Courier,
Advertising and Paging agencies.
As per
section 65(12) (as it was then) "Courier Agency" means a commercial
concern engaged in the door-to-door transportation of time
sensitive documents, goods or articles utilising the services of a person,
either directly or indirectly, to carry or accompany such documents, goods or
articles. Therefore any commercial concern engaged in the activity described
herein above is a courier agency for the purpose of section 66 of the Finance
Act, 1994 (as amended). It is not relevant whether such commercial agency calls
itself courier agency or not, what is of significance is that once the
activities of the assessee concerned falls within the definition of the term "Courier
Agency" the assessee is liable to pay the service tax on the service
provided by him.
"Angadia"
is engaged in commercial activities - undertakes to deliver the
documents, goods or articles received from customers to other end. For this
purpose they are charging service charges from customers for the services
rendered by them. "Angadia" are very much covered by the definition
of "Courier Agency" and are liable to pay the service tax on the
services provided by them.
Request
for service tax exemption on courier/angadia service or lump sum payment of
service tax has also been examined, but it has not been found possible to do
so. Further, to pay a fixed percentage of tax on gross amount does not require
much accounting skill.
Registration/Collection of service tax
from Courier Agencies - Revised Procedure
[C.B.E.
& C. Service Tax, Circular No, 21/1/97 dated 27.1.97.]
Attention
of the Trade is invited to para 22 of Trade Notice No. 82/96Service Tax, dated
1.11.96, according to which where the bills are raised by regional office for
all its branches under that region, the regional office alone may be registered
and not the individual offices which do not raise the bills. Similarly, if the
Head Office of the Courier agency has a centralised billing system in respect
of services rendered to clients from its branches, the head office alone may be
registered. In case the day to day billing is not centralised at the regional
or head office and there is merely a reconciliation of accounts and business
done from each of the Branch offices, each office has to be registered and pay
the service tax. A number of courier agencies have represented that owing to
the peculiar nature of the industry, i.e., the location of small branch offices
at remote places, the lack of manpower and the lack of knowledge about taxation
and accounting, difficulty is being faced by them with regard to registration
of each of the Branch offices and deposit of service tax and completion of
assessment formalities.
2. The matter has been
examined. It has been decided by the Board that to overcome the genuine
problems faced by the courier agencies, they may be allowed to register the
regional offices in relaxation of para 22 of the trade notice referred to
above. The following procedure shall have to be followed by the courier
agencies for availing this mode of registration and payment of service tax.
Once this option is given by one regional office of a courier agency, the same
option has to be given by all regional offices of that courier agency:
(i) The courier agency who
desires to avail this system of registration, shall have to tender the option
in writing to the Assistant Commissioner '(Service Tax Cell) of the Central
Excise Commissionerates under whose jurisdiction the regional office falls
(hereinafter referred to as focal point Commissionerate).
(ii) The details such as the
location and addresses of all Branch offices falling under that region should
be enclosed in duplicate with the written option.
(iii) An undertaking has to
be given- by the regional office to the effect that in case of credit
transact s the service tax shall be paid by the regional office by the 15th
the month following the month in which the credit bills are raised whether or
not the amounts are realised from the customer.
(iv) On receipt of the option
the Assistant Commissioner of Central Excise shall endorse the option letter
permitting the regional office to register with the focal point Central Excise
Commissionerate. The original Copy will be returned to the Regional Office and
the duplicate shall be kept for record.
In most of
the cases, the distribution of regions may not coincide with the jurisdiction
of the Commissionerates. To avoid the overlapping of jurisdiction in the matter
of registration of courier agencies, the Assistant Commissioner of focal point
Central Excise Commissionerates shall endorse a copy of ST-2 along with
the copy of the option permitting for registration by the Regional Office to
other, Central Excise Commissionerates under which the other branch offices
fall.
(v) The regional office shall allocate
the distinguishable running S-Nos. to the Airway bills issued to each
Branch Office.
(vi) The branch offices in
case of cash or walk in customers, shall issue a separate bill along with the
airway bill specifying the service tax separately which may not be the practice
till date.
(vii) The branch offices may
send a monthly sales report to the regional office or the regional office may
prepare a monthly statement on the basis of daily sales report sent by the
branch offices. This monthly statement prepared branch wise by the regional
office should enclose the airway bill as well as the cash/credit bills issued
to all the customers.
(viii) The regional office
shall consolidate the monthly statements prepared' branch wise and shall
prepare a consolidated monthly statement of all sales for that region.
(ix) The regional office
shall attach with the ST-3 return filed with the focal point Central
Excise Commissionerate the branch wise monthly statements along with the
enclosures as mentioned in para (vii) and the consolidated monthly statements
as mentioned in para (viii) relating to the quarter.
(x) For all cash
transactions made during a month, the service tax should be deposited by the
regional office by 15th of the following month in the designated Bank.
(xi) The assessment may be
done by the focal point assessing officer after satisfying himself about the
realisation of service tax in respect of all transactions made through the
branch offices falling under the region.
(xii) In case of doubt, the
Central Excise Commissionerate having jurisdiction over the Branch, to which a
copy of ST-2 has already been endorsed by the focal point Central Excise
Commissionerate shall make a reference to the focal point Commissionerate
calling for copies of assessed ST-3 return along with the enclosures for
reconciling the airway bills, cash/credit bills issued by the branch office
with payment particulars of service tax by the regional office. Similarly, the
focal point Commissionerate, in case of doubt regarding a branch falling
outside the territorial jurisdiction, shall refer the matter to the Central
Excise Commissionerate having jurisdiction over that Branch to verify the Bills
for the purpose of reconciliation.
3. The Courier agencies who
do not opt for the procedure as set out in para 2 above shall be covered under
para 22 of T.N. No. 82/96, dated 1-11-1996 as mentioned in para 1.
4. All Trade Associations,
Chambers of Commerce and members of Regional Advisory Committee are requested
to publicise the trade notice among their members/ constituents.
Extracts from minutes of decisions
taken at central advisory council meeting held on 10-1-1997 (Paras
104 and 105)
1997 (92)
ELT at P.T. 88 & T 90
104. Service Tax Courier Agency -
Exports (FICCI)
The Trade
Notices issued on service tax on courier agencies seems to suggest that a
courier agency is liable to pay service tax on the gross amounts charged in
India from the customer even if documents, goods or articles are delivered
abroad. Thus, having regard to the fact that the territorial limits on service
tax only extend to India, the customer's door and the consignee door must both
be located within India to qualify as a taxable service or a door-to-door
service as envisaged by the statute.
It is
suggested that a clarification be issued to the effect that payments received
by a courier agency for delivery of a consignment outside India would not be
subject to the levy of service tax.
Comments:
The courier agency is liable to pay
service tax on the gross amount, if any charged in India from the
customer even if the documents, goods or articles are delivered abroad, as the
courier agency is providing service to a consignor in India. However, in
respect of documents, goods or articles which have been received from abroad
and delivered to a customer in India, the courier agency is not liable to pay
any service tax provided that the customer in India is not charged any amount
for delivery of such documents, goods or articles in India.
Necessary
clarification has already been issued to field formation in this regard and
there is no need to issue any further clarification in the matter.
Decision:
The department's comments were accepted.
105.
Service Tax - Charges Collect Shipment - Courier Agency (FICCI)
Often a
courier company is requested to collect a shipment from the consignor in India
for delivery to a consignee outside India. The consignor in India is not
required to make any payment to the Indian courier company. Payment is made by
the consignee to the overseas courier which handles delivery outside India. The
Indian courier is paid a certain amount by the overseas courier for collecting
the shipment from the Indian consignor is not a customer of the Indian courier
company. The consignee is also not a customer of the Indian courier company, he
being the customer of the overseas courier company. Also payments are not
received by the Indian courier company from any customer.
It is
suggested that necessary clarification be issued that payments received by the
Indian courier company from the overseas courier company in respect of such
transactions would not be subject to the levy of any service tax.
Comments:
Since the bill for services is raised by overseas courier company to the customer (consignee) abroad, no serve tax
will be charged from the Indian Courier Agency who collect the shipment from
the Indian consignor for onward transmission if no amount is charged from the
consignor in India.
Decision:
The department's comments were accepted.