TRADE NOTICE NO. 02/2017/CE 

              Dated, Shillong the 1st March, 2017.           

            Subject : Applicability of service tax on the services by way of transportation of goods by a vessel                           from a place outside India to the customs station inIndia w.r.t. goods intended for                               transshipment to any country outside India - reg.            

             Attention of members of the trade and industry and all concerned is invited to representations seeking clarification on levy of service tax on the services by way of transportation of goods by a vessel from a place outside India to the customs station in India with respect to goods intended for transshipment to any country outside India.  

2. In this regard, it is mentioned that the goods landing at Indian ports which are destined for any other country are allowed to be transhipped through Indian territory without payment of Customs duty in India. This is subject to the condition that such goods imported into a customs station are mentioned in the import manifest or the import report, as the case may be, as for transhipment to any place outside India. [Section 54(2) of the Customs Act, 1962]. Further, Goods Imported (Conditions of Transhipment) Regulations, 1995 have been prescribed for the procedure to be followed for transhipment of such goods.  

3. It is pertinent to mention that as per the charging Section 66B of the Finance Act, 1994, service tax is leviable on services provided or agreed to be provided in the taxable territory. Whether a service is provided or agreed to be provided in the taxable territory or not, is determined as per Section 66C of the Finance Act, 1994 and the Place of Provision of Services Rules, 2012 made thereunder. In terms of the applicable rule 10 of the Place of Provision of Services Rules, 2012, the place of provision of services of transportation of goods by air/sea, other than by mail or courier, is the destination of the goods.  

4. Thus, with respect to goods imported into a customs station in India intended for transhipment to any country outside India, the destination of goods is not a place in taxable territory in India but a country other than India if the same is mentioned in the import manifest or the import report as the case may be and the goods are transhipped in accordance with the provisions of the Customs Act, 1962 and rules made there under. Hence, with respect to such goods, services by way of transportation of goods by a vessel from a place outside India to the customs station in India are not taxable in India as the destination of such goods is a country other than India.  

Authority: Ministry of Finance, Department of Revenue, (Tax Research Unit)  Circular No. 204/2/2017-Service Tax dated 16.02.2017.                                                                                                                                   

Sd/-

(Gaigongdin Panmei)

Commissioner 

 

C. No. IV(16)05/TECH/TN/SH/2014/18433-98                                    Dated: 01.03.2017 

Copy forwarded for information and necessary action to:—

 

1.                  The Chief Commissioner, Customs, Central Excise & Service Tax, Shillong Zone, “CRESCENS’ Building, M.G Road, Shillong 793001.

2.                  The Commissioner, Central Excise & Service Tax, Dibrugarh.

3.                  The Commissioner of Customs (Prev), N.E.R., Shillong.

4.                  The Commissioner, Central Excise & Service Tax, Guwahati.

5.                  The Commissioner (Appeals), Central Excise & Service Tax, Guwahati.

6.                  The Commissioner (Audit), Central Excise & Service Tax, Guwahati.

7.                  The Joint Commissioner (P & V), Central Excise & Service Tax, Shillong.

8.                  The Assistant Commissioner, (Tech/AE/ Audit), Central Excise & Service Tax, Shillong.

9.                  The Deputy / Assistant Commissioner, Central Excise & Service Tax, All Divisions under Shillong Commissionerate with a request to circulate the same to all Superintendents, of Central Excise & Service Tax Ranges under their respective jurisdictions.

10.              The Superintendent, Adjudication /Anti-Evasion /Appeal /Audit /Law /Statistics /TAR / PRO / Housing & Welfare /Hqrs. Service Tax Cell, Central Excise & Service Tax, Shillong.

11.              The C.A.O. / A.O. , Accounts / ET / GL.

12.              All Trade Association / Chamber of Commerce under Shillong Central Excise Commissionerate.

13.              All R.A.C. Members under Shillong Central Excise Commissionerate.

14.              P.A. to Commissioner, Central Excise & Service Tax, Shillong.

15.              The System Officer, Computer Cell, Central Excise & Service Tax, Shillong, with a request to upload the Trade Notice immediately on the Commissionerate’s website.

16.              Guard File.

 

 

                                                                                                                                                          Sd/-

              (K.D. Wallang)

Superintendent (Tech)