Service Tax on ocean freight - Recent changes

As per the business practice, the overseas supplier engages overseas shipping line to transport the goods to the Indian sea port under the sale term CIF and in terms of the recent amendment, the Agent of the vessel in charge pays service tax, in case the Agent collect the service tax component from the Indian buyer, the Indian buyer shall not be able to claim CENVAT credit as the Indian buyer had no privity of contract in between the overseas supplier and overseas shipping line, therefore the Indian buyer cannot be said to have taken the services.

Sanjay Jain 30/01/2017