SERVICE TAX ON WATERWAY TRANSPORTATION OF GOODS

[Debtosh Dey]

SERVICE TAX ON WATERWAY TRANSPORTATION OF GOODS

1. Stretch of 1620 Kms from 2.5 Kms downstream Sagar(Haldia) to 2 Kms upstream Sangam(Allahabad) in Hooghly-Bhagirathi-Ganga national waters, is notified as “Inland Waterways” under IWAI Act (effective from ’86). The project includes ‘fairway’ for sea-going vessels upto Kolkata under KoPT, dredging, broadening, new terminals, 24×7 navigation, tourism, new lock-gates, pollution control, etc.
2. Six such projects under IWAI and other navigable inland waters within States notified under IV Act, are excluded from Service Tax for goods carriage from Jul’12. Also, vessels coming to India or going out are excluded. Only coastal movement of goods attracts tax [Note : Earlier, all waterways (inland, national and coastal) were taxed since Sep’09 barring some food items, medicines, petroleum, jute, yarn, etc. Subsequently, tax was abated by 25% from Mar’11. With Negative Listing and ‘Point Of Service’ Rules, w.e.f. Jul’12, service tax now stands amended as aforesaid].
3. Customs duty is attracted on import freight including barge-freight. Importer can avail Cenvat on CVD element, if eligible.
4. Service tax is attracted on vessel loading/ unloading, stevedoring and demurrage under “Port Services” as also on CHA service.

Debtosh Dey, M.Sc (Engg), FIE, C.Engg(I), FCMA, FCS, LL.B.