COURIER SERVICES

[Mr. M. GOVINDARAJAN]

Courier services were brought under the service tax net with effect from 1.11.1996. Section 65(105)(f) of the Finance Act, 1994 defines the 'taxable service' in relation to courier services as any service provided or to be provided to any person, by a courier agency in relation to door-to-door transportation of time sensitive documents, goods or articles. Prior to 01.05.2006 only a commercial concern was liable to tax for providing service under this category. After 01.05.2006 the scope of the tax liability of courier services was enhanced by making any person providing these services.

The term 'Courier Agency' is defined by Section 65(33) of the Act as any person engaged in the door-to-door transportation of time sensitive documents, goods or articles utilizing the services of a person, either directly or indirectly, to carry or accompany such documents, goods or articles.

The CBEC Instructions Letter F. No.341/43/96-TRU, dt. 31.10.1996 states that the nature of business of courier agency is quite distinct from the ordinary transporters which carry goods from one place to another place. What distinguishes the commercial concern as courier agency from an ordinary transporter is the service provided by it in the door-to-door transportation of time sensitive documents, goods or articles.

The Master Circular No. 96/7/2007-ST, dated 23.08.2007 has provided the following clarifications:

> Some transporters undertake door-to-door transportation of goods or articles and they have made special arrangements for speedy transportation and timely delivery of such goods or articles. Such services known as 'Express Cargo Service' with assurance of timely delivery - Whether such 'Express Cargo Service' is covered under Courier Service? Clarification for this question is that the nature of service provided by 'Express Cargo Service' provider falls within the scope and definition of the 'Courier Agency'. Hence the said service is liable to service tax under Courier Agency Service.

>  'Angadia' undertaken delivery of documents, goods or articles received from a customer to another person for a consideration - Whether services provided by Angadia is liable to service tax under Courier Agency Service? - Clarification for this question is that Angadias are covered within the definition of 'Courier Agency'. Therefore such services provided by Angadia are liable to service tax under Courier Agency Service. 

> Department of posts provides a number of services. What is the status of those services for the purpose of levy of service tax? - Clarification for this questions is that the following services provided by the Department of Post are not liable to service tax:

* Basic mail services known as postal services such as post card, inland letter, book post, registered post provided exclusively by the Department of Posts to meet the Universal Postal Obligations;

* Transfer of money through money order, operation of savings accounts, issue of postal orders, pension payments and other such services.

It is further clarified that the Courier services (Speed Post) provided by Department of Posts is liable for service tax.

RELEVANT CASE LAWS:

1. Vijayanand Road Lines Ltd., V. Commissioner of Central Excise - [2007 -TMI - 2421 - CESTAT, BANGALORE]

When the services of a person are utilized either directly or indirectly in asmuchas the customer goes to the courier agent's office and delivery of documents etc., such services are covered under the definition of 'courier service'.

2. On Time Couriers V. Commissioner of Central Excise - [2005 -TMI - 101 - CEGAT, KOLKATA]

No service tax was leviable when business between two courier agencies as the definition of courier agency covers only such services as are provided to customers.

3. U.B. Express (South) Pvt., Ltd., V. Commissioner of Central Excise & Service Tax, Coimbatore - [2008 -TMI - 30944 - CESTAT, CHENNAI]

The appellants provide service under the category of courier service. During the period from 15.03.05 to 16.6.05 the appellant was engaged in international courier service but did not pay any service tax. The Commissioner found that the service engaged in by the appellant who involved transport and delivery of articles and documents abroad could not be held to the service partly rendered in India and partly abroad. Therefore tax had to be paid on what the appellant describes as international courier service.

The tribunal held that in terms of Rule 4 of Export of Service Rules, 2005 any taxable service under Section 65(105) of the Act could be exported without payment of tax. It is obvious that the appellants were not liable to pay service tax on the international courier service, part of which, in each transaction, was provided in India and the rest outside India.

4. Speed and Safe Courier Services V. Commissioner of Central Excise, Cochin - [2008 -TMI - 4174 - CESTAT, BANGALORE]

The appellant has entered into franchise agreement with various persons for providing courier service. The franchisees are rendering courier services and service tax liability has been discharged on the amount collected by the franchisees. As franchiser was entitled to balance of commission, it was an amount received by them for rendering franchise services, which was entirely different from courier services of franchise. Since the franchise service has been brought under the service tax net the appellant is clearly liable for discharging service tax liability on this.

5. Professional Couriers V. Commissioner of Central Excise & Customs, Vishakapatnam - [2008 -TMI - 4570 - CESTAT BANGALORE]

The appellants were receiving certain machinery for repair and return. They took this machinery for getting it repairs at the respective centers as per the directions of the clients. Such activity cannot be termed as 'Courier Services'.  The appellants did not contend before the lower authorities that they would not be liable to service tax under the category of 'Courier Agency'.   The tribunal held that from the definition for 'Courier Agency' it is very clear that even the goods or articles is also covered by Courier Agency and the same is not confined to only time sensitive documents as contended by the appellants.