PORT SERVICES

Date of Introduction: 16.7.2001 vide Notification No.4/2001-ST dt.09.07.2001.

Definition:

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.
(Section 65(51) of Finance Act, 1994 as amended) “Port” has a meaning assigned to it in clause (q) of Section 2 of Major Port Trusts Act, 1963 (38 of 1963). (Section 65(50) of Finance Act, 1994 as amended)

Taxable events and scope of service:

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.
(Section 65(72) (zn) of Finance Act, 1994 as amended)

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 authorized by the port rendering these services is the service provider.

Value of Taxable Service:

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

(i)  Port and dock charges consisting of berthing and mooring charges, port dues, pilotage and towage, water supply charges, salvage and diver charges, anchorage fee;
(ii) Cargo handling and storage charges 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;
(iii) Railway haulage charges for rail-borne goods, local haulage and storage;
(iv) Container handling charges consisting of import, export and transhipment wharfage on containers, equipment charges for handling of containers, container storage charges;
(v)  Labour charges.

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. For any other charges not mentioned above the Commissioner may decide the inclusion in the value of taxable service on merits. (Ministry’s F.No.B11/1/2001-TRU dt.09.07.2001)

Exemption & Exclusion:

Estate rentals of the port which is charged for renting of accommodation provided to outsiders and port users, lease rental for land, etc. will not be liable to Service Tax as these are not services rendered in relation to goods or vessels.
(Ministry’s F.No.B11/1/2001-TRU dt. 09.07.2001)
 

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