Service Tax on courier service - Service Tax - F. No. 168/1/96-CX. 4

Service Tax on courier service M.F. (D.R.) letter issued under F. No. 168/1/96-CX. 4, dated 10-10-1997 and Trade Notice No. 271/68/97, dated 7-11-1997 of the Nagpur Commissionerate Attention of Trade is invited towards this Commissionerate Trade Notice No. 191/67/96, dated 9-12-1996 regarding imposition of Service Tax on Courier, Advertising and Paging agencies. As per Section 65(12) "Courier Agency" means a commercial concern engaged in the door-to-door transportation of time sensitive documents, goods or articles utilising the services of a person, either directly or indirectly, to carry or accompany such documents, goods or articles. Therefore any commercial concern engaged in the activity described herein above is a courier agency for the purpose of Section 66 of the Finance Act, 1994 (as amended). It is not relevant whether such commercial agency calls itself courier agency or not, what is of significance is that once the activities of the assessee concerned falls within the definition of the term "Courier Agency" the assessee is liable to pay the service tax on the service provided by him. "Angadia" is engaged in commercial activities - undertakes to deliver the documents, goods or articles received from customers to other end. For this purpose they are charging service charges from customers for the services rendered by them. "Angadia" are very much covered by the definition of "Courier Agency" and are liable to pay the service tax on the services provided by them. Request for service tax exemption on courier/angadia service or lump sum payment of service tax has also been examined, but it has not been found possible to do so. Further, to pay a fixed percentage of tax on gross amount does not require much accounting skill.