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Steamer Agent Services [Sec 65(105)(i)]
Effective upto 30th June, 2012
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Landmark Service Tax Judment - Steamer Agent Services

Introduced With Effect From 15th June 1997
 
Contents
Scope
Exemption
Landmark Judgements
Accounting Code
Service Tax 00440029
Interest  00440030
Penalty 00441303
 
DEFINITION:

According to Section 65 (105) (i), any service provided or to be provided to a shipping line, by a steamer agent in relation to a ship’s husbandry or dispatch or any administrative work related thereto as well as the booking, advertising or canvassing of cargo, including container feeder services, is a ‘taxable service’.

According to Section 65 (100), “steamer agent” means any person who undertakes, either directly or indirectly,-

(i) to perform any service in connection with the ship’s husbandry or dispatch including the rendering of administrative work, related thereto; or

(ii) to book, advertise or canvass for cargo for or on behalf of a shipping line; or

(iii) to provide container feeder services for or on behalf of a shipping line.

 
SCOPE:
TOP

Normally a shipping company cannot open its branches at each and every port. So generally, a steamer agent is appointed at each and every port that will provide services on behalf of the company. The steamer agent can be any person and services may be provided directly or indirectly, the steamer agent will charge commission for the services rendered to the shipping company.

There are two types of steamer agents:

Protecting agent

Operating agent

Protecting agent looks after the ships husbandry work. A ships husband i.e. the managing owner will do everything necessary to enable ship to commence voyage and earn freight. He looks after repairs insurance, hull maintenance, equipment management and other concerns of ship.

Operating agent will look after loading, unloading of cargo stuffing of container, filing of IGM and other administrative work.

Functions of steamer agent in case of IMPORTS:

He gets the details regarding the arrival date of the ship, details of cargo, shipping stores and other details of Inward General Manifest (IGM). He prepares and submits the IGM to the customs department.

He arranges a berth for the ship on the port and also makes arrangement for loading and unloading of cargo. He arranges for cargo to be unloaded near the berth. He prepares a list of cargo unloaded and arranges a shed or place where the unloaded cargo can be stored. He gets cargo in number from the port authorities. He gets the cargo stuffed and keeps the record of the cargo. He collects charges from the customer on behalf of the shipping line and pays the port charges and taxes on behalf of the shipping line.

Functions of steamer agent in case of EXPORTS:

He receives the cargo from the customer and issues shipping bill to the customer besides he collects freight from the customer if it’s a “paid shipping bill”. He collects the port charges and other taxes from customer. He gets the cargo stuffed near the berth for loading and arranges for loading of cargo when the ship arrives on the berth.

He prepares a list of consignments which are to be exported and handovers a copy to the captain of the ship. He gets the mate receipt from the captain of the ship and gives a copy to customer.

The steamer agent books cargo for or on behalf of a shipping line. For getting more cargo he advertises, canvasses, including giving advertisement in newspapers, bulletins, magazines. The steamer agent also provides container feeder services whereby goods are transhipped from larger port to smaller ports.

Many time steamer agent make en block booking of space and make payment of that space whether or not cargo is booked or not. If the steamer agent deals directly with the shipping and retains any commission out of any amount collected by him, the same will be liable for Service Tax. However if  such steamer agent deals with the agent of such shipping line, then no Service Tax is leviable on the agent making en block booking. Container handling receiving service rendered by the steamer agent is liable to Service Tax.

The service charges of a steamer agent will constitute husbandry fee as well as agency commission on import / export cargo. Other expenses incurred the steamer agent on behalf of the shipping line shall not be taken into account.

Only such sea port offices of the steamer agent should be registered for Service Tax purposes which are raising the bill to shipping lines.  The offices which are just sales offices and do not raise any bills on shipping lines need not be registered. Shipping line means any person who owns the ship or charter s a ship and includes an enterprise which operates or manages the business of shipping.

 
SERVICE TAX EXEMPTIONS:
TOP

(a)  Small service providers whose aggregate value of taxable services rendered in the previous year has not exceeded the limit of Rs. 10,00,000/-  (Service Tax Notification No. 8/2008-ST dated 01.03.2008)

(b)  Services provided to the United Nations or International Organisations

(c)  Services provided to Special Economic Zones (SEZ) units (including unit under construction) and SEZ developers

(d)  Services which are exported as per ‘Export of Services’ Rules

(e)  Services provided for official or personal use of foreign diplomatic missions and family members of diplomatic missions.

(f)  Services provided by Reserve Bank of India

(g)  Out of total value of service provided proportionate value of goods and material provided by the Service Provider

 
RELEVANT SERVICE TAX CIRCULARS/INSTRUCTIONS/TRADE NOTICES:
Service Tax  CBEC Instruction Letter B43/1/97-TRU dated 06-06-1997 Scope and taxability of services introduced or extended by the Finance Act, 1997 including steamer agent's services.
 
 
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Case Laws Related

  • STO 2013 CESTAT 1105
  • Steamer Agent Service: Earlier dispatch of cargo is nothing but steamer agent service: Pre deposit waived.

  • STO 2013 CESTAT 1171
  • Steamer Agent: Ocean Freight: Demand on reimbursable expenses: Concept of reimbursement will arise only when the person actually paying was under no obligation to pay the amount and he pays the amount on behalf of the buyer of the goods and recovers the said amount from the buyer of the goods appellant is not even a Steamer Agent but books shipping space for other customers and in such cases he is only doing this for the customers and charging for his services: Matter remanded back.

  • STO 2010 CESTAT 100
  • Service Tax: Steamer Agents Service: Pre-deposit: The assessee apparently rendered a service falling under SAS to the shipping lines for whom it booked cargo space. The assessee is prima facie, liable to pay tax on the commission it received. No irregularity is recorded to have been noticed in the conduct of the assessee. These circumstances apparently warrant waiver of penalty u/s 78 of the Act. The appellant to deposit the entire service tax amount (para 6.1,6.2,7 )

  • STO 2009 CESTAT 1451
  • Service tax: Steamers Agents Service: Taxable value: Documentation charges whether includable: In this case, the demand was confirmed after invoking the extended period of limitation and it is an admitted fact that the appellants are receiving documentation charges from their customers to whom they are providing ‘Steamers Agents Service’ for supply of extra copies of document. In the circumstances, it is not a fit case for total waiver of pre-deposit.(Para 3).

    Pre-deposit ordered.

  • STO 2007 CESTAT 810
  • Service Tax: Business Auxiliary Services: Scope: The activities carried out by the appellants do not fall within the first category of "promotion or marketing or sale of goods.....etc." and so also under the category (iii) i.e. any customer care service provided on behalf of the client under Business Auxiliary Services. The learned JDR refers to category (ii) promotion or marketing of service provided by the client. Whether the activity of rendering services of arranging shipment of the export cargo and negotiating the same with the shipping lines on behalf of the clients will fall under definition of 'Business Auxiliary Services' under Section 65(19) (ii) of Finance Act. More specific category for coverage would be under the 'Steamer Agent' service which clearly refers to the type of activities carried out by the appellants under Section 65(100)(ii) i.e. "to book, advertise or canvass for cargo for or on behalf of a shipping line". The promotion or marketing of service provided by the client in category (ii) of 'Business Auxiliary Services' under Section 65(19) of Finance Act has to be read along with category (i) and (iii) of the definition of 'Business Auxiliary Services'. It cannot be broad enough to bring in a specified activity which has been delineated under steamer agent under the definition of 'Steamer Agent' under Section 65(100) which specifically covers in its item 2. i.e., "to book, advertise or canvas for cargo for or on behalf of a shipping line". In view of this category already mentioned under Steamer Agent, the plea of the appellant that they are not covered under the 'Business Auxiliary Services' is required to be upheld. There is no merit in the impugned order(Para 4).

    Appeal allowed.

  • STO 2007 CESTAT 133
  • Service Tax: Steamer Agent: Application for condonation of delay in filing of an appeal: The appellant had not pursued the appellate remedy with diligence it deserved. It is seen from the Apex Court's decision in the case of UOI v. Tata Yodogawa Ltd. reported in STO 1988 SC 21, that in that case the application seeking condonation of delay of 51 days filed by the revenue was dismissed for the reason that the appellant had failed to explain the cause for the delay. The Hon'ble Apex Court felt that the delay was not condonable even after giving certain latitude to the appellant, it being an impersonal body and took longer time than private bodies or individuals. The delay involved has not been satisfactorily explained.(Para 6).

    Application rejected, appeal dismissed.

  • STO 2006 CESTAT 820
  • Service Tax: Steamer agent: Cenvat credit on port services: Registration with retrospective effect: Appellants during the relevant period were registered as steamer agent and the input services received by them were registered as a port services and that both of them do not fall in the same sub-clause of Clause 90 of Section 65 of the Act and therefore, in view of the provision of Rule 3 of Service Tax Credit Rules, registrations are not granted with retrospective effect. The appellants have not been able to make a prima facie case in their favour.(Para 3).
    Pre-deposit ordered.

     
     

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