Clarification on Service tax on freight charges - Service Tax - F.No: 137/131/2007 CX-4

Clarification on Service tax on freight charges TRADE NOTICE NO: 5/2008/service tax no. 2/2008, DATED 5-2-2008 issued by office of the commissioner of central excise, madurai 02 A Copy of Board's letter F.No: 137/131/2007 CX-4 dated 12-12-2007 (Annex) issued by the Government of India, Ministry of Finance, Department of Revenue, New Delhi is communicated herewith for information, guidance and necessary action. 2. The contents of the abovesaid letter may be brought to the notice of all the constituent members of your Trade Association. Annex LETTER F. NO. 137/131/2007 CX.4, DATED 12-12-2007 Postal Department has engaged shipping companies for conveyance of outwards surface Indian Postal Mails to various ports of foreign countries and handling of export cargo or passenger baggage etc. From the facts mentioned it appears that the service provided by shipping companies is in the nature of 'distribution, management and logistics' and delivery order charges and inland haulage charges collected by shipping companies are for such 'distribution, management and logistics' service. Such service is specifically covered under 'business support services' and is liable to service tax.