News Flash
  • Weekly newsletter from Chairman, CBEC dated 25/05/2018. Click here
  • Introduction of monetary limit at the level of Commissioner (appeals) Click here
  • Nominatioans are invited from the formations of Bengaluru Zone for the ‘Course on Drugs and Related Laws’ scheduled on 29.05.2018 and 30.05.2018 Click here
  • CBLR Written Wxamination Result held on 19.01.2018 Click here
  • Instruction regarding Suo Motu Trasfer of authorisations on behalf of Union of India by the Authorised Commissioners. Click here
  • DDM-GST-5 MPR (showing Revenue Augmentation) has been Operationalized on DDM website today. GST Commissionerates are required to start uploading the requisite data from the month of July,2017 upto April,2018 at the earliest.
  • Member (A)'s instructions regarding revision of pre-2016 Pensioners as per 7th CPC. Click here
  • One Day Workshop On " E-Way Bill Systems" for the Group 'A' Officers of CBIC on 08th June, 2018 Click here
  • Weekly newsletter from Chairman, CBEC dated 18/05/2018. Click here
  • Notification issued for extending the due date of filing of FORM GSTR-3B for the month of April, 2018. Click here
  • Diversion of the posts of Principal Chief Commissioners of CBEC on their promotion. Click here
  • Draft Integrated All India Seniority List of Administrative Officers of Customs for the period 01.07.2014 to 31.12.2016 Click here
  • Circular regarding calling options for posting from ACs promoted vide Office Order No. 79/2018 dated 11.05.2018 Click here
  • Repair of Machinery and Equipment of vessel No. 22deployed at Nagapattinam. Click here
  • Repair of Machinery and Equipment of vessel No. 09 deployed at Visakhapatnam. Click here
  • Repair/ overhaul of Machineries /equipments installed onboard Category-I vessel Hull No. 16 deployed at Kandla
  • Repair/ overhaul of Machineries /equipments installed onboard Category-I vessel Hull No. 13 deployed at Ratnagiri
  • Suggestion/comments are invited from field formations on Reduction of Government litigations- Introduction of monetary limits at the level of Commissioner (Appeals), in legacy Central Excise & Service Tax matters only latest by 21st of may 2018. Click here
  • Letter to all Pr. CC/Pr. DG/CC/DGs for details of officers promoted as AC vide Office order No 79/2018 dated 11.05.2018. Click here
  • One Day Training Workshop On Usage Of Rajbhasa Hindi in Official Works and Procedures” for the Gr- A Officers of CBIC on 25th May, 2018. Click here
  • Repair/ overhaul of Machineries /equipments installed onboard Category-I vessel Hull No. 15 deployed at Mumbai Click here
  • Repair/ overhaul of Machineries /equipments installed onboard Category-I vessel Hull No. 11 deployed at Mumbai Click here
  • All India Workshop on relevant Supreme Court/High Court judgements & its impact on departmental function at NACIN, Bangalore on 25.05.2018" for CBIC officers Click here
  • Updated version of GST Concept and Status and PPT on GST - An Update as on 01/05/2018 have been uploaded
  • Positive Change through Emotional Intelligence and Personality Development Click here
  • Grievance Redressal Officers (CBIC and State / UT Governments) for e-way bill system under rule 138D of Central/ State GST Rules, 2017 Click here
  • Circular on applicability of POPS to development of software and services on software issued - Click here
  • Change of Date Of "Two Days' Training Programme On Free Trade Agreement, Possible Misuse & Redressal Mechanism" from 14th & 15th May to 28th & 29th June, 2018 Click here
  • Annual General Transfer 2018 Circular Click here
  • Wider participation of citizens/public/employees is requested in taking online Integrity Pledge. For taking online Integrity Pledge please click here
  • Advisory on AIO functioning, connectivity issues for GST.-click here, TCS Escalatoin Matrix for GST Zones LAN Implementation, Wipro Handholders, HP Resident Engineers
View all

Section 37 B Order No.2/1/2002-ST

F.No.137/04/2002 CX.4
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

24th April, 2002.

37 B Order No.2/1/2002-ST

Subject:- Providing service of storage facility and charging rent for Storage of liquid cargo in tanks - whether liable to service tax as C&F Agents, - regarding.

      In exercise of the powers conferred under Section 37 B of the Central Excise Act, 1994 (as made applicable to Service Tax by Section 83 of the Finance Act,1994), the Central Board of Excise & Customs considers it necessary, for the purposes of uniformity in connection with classification of services, to issue the following instructions.

2.      Doubts have been raised as to whether service of storage facility and charging rent for storage of liquid cargo in tanks, provided by certain agencies, can be considered as a service provided by 'clearing and forwarding agents' or not.

3.      This matter was raised by four such agencies before the Mumbai High Court in Writ Petition Nos.170/2002, 171/2002, 2962/2001 & 2994/2001. The petitions were disposed of by Hon'ble Court with directions to the Central Board of Excise & Customs to pass appropriate speaking clarification and/or, orders after hearing the petitioners.

4.      The agencies were accordingly heard in the matter on 19th March, 2002 and on 3rd April.

5.      Views of DGST and concerned Commissioners of Central Excise have also been obtained.

6.      It is observed that the above agencies are engaged in the activity of providing storage (tanks) facility for liquid cargo which has been imported or is intended for export. They charge rent for storage of liquid cargo deposited with them.

7.      It is observed that, as per Section 65 of Finance Act, 1994 'Clearing & Forwarding Agent' means "any person who is engaged in providing any service, either directly or indirectly connected with the clearing and forwarding operations in any manner to any other persons and includes a consignment Agent". Further, 'taxable service' with respect to C&F Agents means, any service provided to a client by a clearing and forwarding agent in relation to clearing and forwarding operations, in any manner.

8.      The issue is whether the activity/service of providing storage facility and charging rent, for storage of liquid cargo in tanks, can fall under the category of 'Clearing and Forwarding' operations as defined under Section 65 of Finance Act, 1994.

9.      The main point raised by the agencies is that they are not at all rendering any clearing and forwarding services and hence they do not come under the category of clearing and forwarding agents. They simply issue Invoices/Bills to their customers towards storage charges only and for no other charges.

10.      The matter has been examined. Normally, a C&F agent receives goods from the factories or premises of the Principal or his agents, stores these goods, despatches these goods as per orders received from the Principal or owner, arranges transport, etc. for the purpose and prepares invoices on behalf of the Principal. For this service, the C&F agents receives commissions on the basis of agreed terms. Therefore, an essential characteristic of any services, to fall in the category of C&F agent, is that the relationship between the service provider and receiver should be in the nature of principal(owner) and agent. The C&F agent carries out all activities in respect of goods right from stage of their clearances from the premises of the principal to its storage and delivery to the customers.

11.      However, in the cases under consideration, the agencies are providing only storage facility for liquid cargo which has been imported or is intended for export. They charge rent for storage of liquid cargo deposited with them. They are not connected with the vessel bringing the goods and are not concerned with customs formalities. They issue invoices to customers towards storage charges and for no other charges. These agencies are not receiving any commission from the principal but only rental for storage facility, whereas a C&F agent's remuneration is in the form of commission. The transactions between the parties are not transactions between principal and an agent but between principal and principal. These agencies are neither receiving any despatch orders from the owners of the goods, nor are they arranging for the despatch of goods as per their directions by engaging transport, as is done normally by C&F agents. They are also not carrying out any service directly or indirectly in connection with clearing and forwarding operations. Therefore, services rendered by such agencies, in relation to storage of cargo, can not be considered to be in the nature of 'clearing and forwarding' agent and such agencies cannot be considered as "clearing and forwarding agents".

12.      However, under the Finance Bill, 2002 "storage and warehousing services for goods including liquids and gases" is proposed to be made to liable to service tax. Section 65 (87) of the proposed amended Finance Act, 1994, defines "storage and warehousing" to include storage and warehousing services for goods including liquids and gases but does not include any service provided for storage of agricultural produce or any service provided by cold storage. Therefore, as and when these provisions of the Finance Bill come into effect the above types of cases shall be liable to service tax under the head "storage and warehousing".

13.      Suitable Trade notice may be issued for information of trade and field formations.

14.      The receipt of this order may kindly be acknowledged.

15.      Hindi version will follow.

A.K.Prasad
Director (CX.4)
Tel: 3012812
Fax: 3792965