Service Tax — Clarification on Service tax on freight charges - Service Tax - 5/2008 (Service Tax No. 2/2008)

Commissioner of Central Excise, Madurai Trade Notice No. 5/2008 (Service Tax No. 2/2008) dated 5-2-2008 A copy of Board s letter F. No. 137/131/2007-CX.4, dated 12-12-2007 issued by the Government of India, Ministry of Finance, Department of Revenue, New Delhi is communicated herewith for information, guidance and necessary action. The contents of the above said letter may be brought to the notice of all the constituent members of your Trade Association. (Copy of Board s 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. Sd/- (Gauatam Bhattacharya) Commissioner (ST) Central Board of Excise Customs