Whether Demurrage attracts Service tax

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..... Dear Experts, Whether demurrage charges collected/charged by service provider attracts service Tax? For example, A GTA may charge demurrage(also known as detention charge) over and above the freight in case there is delay in loading or unloading. Here freight is undobutedly consideration for service provided, where as demurrage is penal/compensatory in nature. Kindly opine. Regards, .....

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..... SL Naik - Reply By pradeep khatri - The Reply = If demurrage is collected as freight, then service tax is payable under GTA services. - Reply By Vijay Chitte - The Reply = Demurrage charges are levied when goods are not cleared within stipulated period. These are penal in nature. The charge is not for providing transport service, Moreover, these are never shown on c/ment Note/ Invoice of GTA. .....

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..... These can not be included for purpose of service tax on GTA service. CBE C, vide it circular No. 121/3/2010-ST dated 26-04-2010 has clarified that detention charges charged by shipping company / steamer agent for keeping container beyond specified periods is "Penal rent" and not a service. No service tax will be payable . This principle applies here also. - Reply By KASTURI SETHI - The Reply = .....

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..... Stock Broker s services - Service Tax on delayed payment charges collected by service provider - Clarification Instruction F. No. 137/25/2011-S.T ., dated 3-8-2011 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Clarification regarding Service Tax on delayed payment charges collected by the service .....

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..... provider in respect of Stock Broker s services - Regarding. - Whether Demurrage attracts Service tax - Query Started By: - Shyam Naik Dated:- 26-5-2011 Service Tax - Got 3 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax .....

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