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2016 (9) TMI 291

Head Note:
Taxability of services provided in relation to outbound shipment and inbound shipment – freight margin - Rule 2(f), Rule 9(c), Rule 10 of Place of Provision (POP) Rules, 2012 - scope of the term Intermediary – M/S Global Transportation Services Private Limited (hereinafter also referred to as applicant seeks to provide logistics solutions to its customers, comprising of number of services, which are mutually exclusive and can be provided on a standalone basis. - Held that: - In the case before us, applicant would enter into an agreement with the carrier for transportation of cargo i.e. airline/shipping line. This service agreement would be on principal to principal basis and not as agent of said airline/shipping line. Therefore, applicant would be covered by the exclusion clause i.e. provides the main service- inbound and outbound shipment on his own account in terms of Rule 2(f) of POP Rules and thus not covered under Rule 9 ( c) ibid as “intermediary” service. Therefore, place of provision of said service will not be location of service provider.

Place of provision of service of transportation of goods shall be the place of destination of the goods, as per Rule 10 of POP Rules. In the case of outbound shipment destination of goods shall be outside India. Therefore, place of provision of service of outbound shipment shall be outside India - no Service Tax on freight margin recovered by the applicant from the customer.

Inbound shipment – Held that: - upto 31-5-2016, exemption provided to transportation of goods by aircraft and vessel under Section 66 D of the Act as same is service by way of transportation of goods by air or sea from a place outside India into Indian Customs area - However, exemption provided to transportation of goods by aircraft has been extended vide Notification No. 9/2016-ST (S. No. 53) w. e. f. 01.06.2016 – in view of exemption notification inbound shipment not taxable.

Bundled service – section 66F of the act – Held that: - activities of the applicant are mutually exclusive and can be provided on standalone basis – service provided does not come under bundled service.

Transportation of goods by aircraft and vessel - Section 66D of the Act – Held that: - section 66D negative list existed prior to 1-6-2016. From 1-6-2016 negative list entry withdrawn.

CENVAT credit – input services – Held that – no service tax leviable on applicant – no question of CENVAT credit.


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