"Port" has the meaning assigned to it in clause (q) of Section 2 of the Major Port Trusts Act, 1963 (38 of 1963); [Section 65 (81)]

Indian Service Tax

Port Services (Major Ports)

N.B. See also Port Service (Minor Ports)

Effective Date: 16/07/2001.

Authority: Notification No. 4/2001-ST, dt. 9/7/2001 (for full text of Notification see under Broadcasting).

Rate of Service Tax: 8% from 14/5/2003 (5% upto 13/5/2003). 10% from 10/9/2004 - Cess 2% of 10% = 0.2. Total ST = 10.2%.

Definitions: "Port" has the meaning assigned to it in clause (q) of Section 2 of the Major Port Trusts Act, 1963 (38 of 1963); [Section 65 (81)]

"Port Service" means any service rendered by a port or other port or any person authorised by such port or other port, in any manner, in relation to a vessel or goods; [Section 65(82)]

"Other Port" has the meaning assigned to "Port" in clause (4) of Section 3 of the Indian Ports Act, 1908 (15 of 1908), but does not include the port defined in clause (80); [Section 65 (76)]

"Ship" means a sea-going vessel and includes a sailing vessel, [Section 65 (96)]

"Shipping Line" means any person who owns or charters a ship and includes an enterprise which operates or manages the business of shipping; [Section 65 (97)]

"Vessel" has the meaning assigned to it in clause (z) of Section 2 of the Major Port Trusts Act, 1963 (38 of 1963), [Section 65 (118)]

Taxable Service: Port services provided by a port or any person authorised by the port to any person.

Value of taxable service: Gross amount charged from the person to whom port services are provided.

Exemptions

• Estate Rentals, lease rental for land

• Airports, ICDs, Land Customs Stations

Person liable to pay: Port or Authorised person.

Head of Account

SI. Code SCCD Minor-head 004400144 Port Services 00440176 Sub-head 00440014401 Tax Collection 00440177 115 Sub-head 00440014402 Other Receipts 00440178 114 Sub-head 00440014403 Deduct Refunds 00440179 117

Main text of Departmental Circular/TN

[Ministry's F.No. B.lI/I/2000-TRU dated 9/7/2001 - Annexure VIII]

1. As per the Section 65(51)*, the "port services" means any,service rendered by a port or any person authorized by the port, in any manner, in relation to a vessel or goods. As per Section 65 (72)(zn), taxable service is any service provided to any person by a port or any person authorized by the port, in relation to port services, in any manner.

2. Port services generally consist of port and dock services (these are for services rendered in relation to vessels), cargo handling and storage services, railway haulage services, and container handling services (these are for services rendered in relation to goods). The Dock Labour Board of the Port provides service of labour for handling of goods. The port or the person authorised by the port rendering these services is the service provider.

2.1 Some of the specific charges for the services rendered in respect of port services: are as follows­

• Port and dock charges consisting of berthing and mooring charges, port dues, pilotage and towage, water supply charges, salvage and diver charges, anchorage fee;

• Cargo handling and storage charge' consisting of wharfage for general cargo, warehousing charges, cranage charges, ore handling charges, wharfage on petroleum products, weighment charges for lorries, traffic appliance charges, weighment charges for goods

• Railway haulage charges for rail-borne goods, local haulage and storage

• Container handling charges consisting of import, export and transhipment wharfage on containers, equipment charges for handling of containers, container storage charges,

• Labour charges.

2.2 All these charges form part of taxable value of port services. Demurrage charges are recovered by port authority as a rental for storage of goods. The fact that these charges apply only if the goods overstay a prescribed free period, does not detract from their being in the nature of a charge for providing a service in relation to goods. Accordingly they would form part of taxable value. The Dock Labour Board is liable to pay service tax on the labour charges recovered by them. However, estate rentals of the port which is charged for renting of accommodation provided to outsiders and port users, lease rental for land, etc., wilt not be liable to service tax as these are not services rendered in relation to goods or vessels. For any other charge not mentioned above, the Commissioner may decide the inclusion/exclusion in the value of taxable service on merits.