SHIP MANAGEMENT
Date of Introduction: 01.05.2006 vide Notification No.15/2006 dated 25.04.2006
Definitions:
ship management service” includes,—
(i) the supervision of the maintenance, survey and repair of ship;
(ii) engagement or providing of crews;
(iii) receiving the hire or freight charges on behalf of the owner;
(iv) arrangements for loading and unloading;
(v) providing for victualling or storing of ship;
(vi) negotiating contracts for bunker fuel and lubricating oil;
(vii) payment, on behalf of the owner, of expenses incurred in providing services or in relation to the management of ship;
(viii) the entry of ship in a protection or indemnity association;
(ix) dealing with insurance, salvage and other claims; and
(x) arranging of insurance in relation to ship; (section 65(96a) of the Finance Act, 1994)
“taxable service” means any service provided or to be provided to any person, under a contract or an agreement, by any other person, in relation to ship management service; (section 65(105)(zzzt) of the Finance Act, 1994) Value of Taxable Service: The value of taxable service shall be the gross amount charged by the service provider for providing such service and the money value of any other consideration ( if any) received for providing such service. The value of taxable service shall be determined as per the provisions made under section 67 of the Finance Act, read with Service Tax (Determination of Value ) Rules, 2006
Who is responsible to pay Service Tax:
The service provider is responsible to pay service tax. However, in cases, where the provider of taxable service is located outside India and the recipient of service is located in India, the recipient of service is responsible for payment of service tax. The responsibility to pay service tax under such situations is determined by the provisions made under section 66A of the Finance Act, 1994, read with Taxation of Services (Provided from outside India and received in India) Rules, 2006
Scope of Service:
Owners or operators of ships enter into an agreement with ship managers for provision of a wide range of services in respect of running and operations of ships. Indicative list of services provided under this category are mentioned under the definition of “ship management service”.
(Ref: Joint Secretary (TRU)’s letter D.O.F.No. 334/4/2006-TRU dated 28.02.2006)
General Exemptions:
|
Sr.No. |
Notification No. |
Nature of exemption |
|
1 |
16/2002 |
Services provided to United nations or any International Organisation |
|
2 |
12/2003 |
Exemption to value of goods and material sold during the course of providing taxable service, subject to conditions laid down in the notification. |
|
3 |
4/2004 |
Service provided to a developer of Special Economic Zone or Unit located in SEZ |
|
4 |
6/2005 |
Exemption from service tax for taxable services upto gross value of Rs. 4 lakhs, in case of service providers whose gross turnover for the preceding financial year was less than Rs. 4 lakhs ( w.e.f 01.04.2005) |
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