1. Introduction

1.1 Service Tax on Cargo Handling services was introduced on 16.8.2002 vide Notification No.8/2002ST, dated 01.08.2002

1.2 Service Tax is currently leviable @ 10.30% on the value of the taxable service. The tax rate is worked out as follows:

(i) Service Tax @ 10% ad-valorem vide Section 66 of the Finance Act, 1994 read with Notification No.8/2009-ST, dated 24.2.2009,

(ii) Education Cess @ 2% of the Service Tax amount vide Section 85 of the Finance Act, 2004, and

(iii) Secondary and Higher Education Cess @ 1% of the Service Tax amount vide Section 126 of the Finance Act, 2007 .

2. Definitions

2.1 As per Finance Act, 1994 , Section 65(23) "Cargo Handling service" means loading, unloading, packing or unpacking of cargo and includes:

(a) cargo handling services provided for freight in special containers or for noncontainerised freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport, and cargo handling service incidental to freight; and

(b) service of packing together with transportation of cargo or goods, with or without one or more of other services like loading, unloading, unpacking,

but does not include, handling of export cargo or passenger baggage or mere transportation of goods.

2.2 Under Section 65(105)(zr) of the Finance Act, 1994 a taxable service in relation to Cargo Handling services means any service provided or to be provided to any person, by a cargo handling agency.

10. Clarification(s)

10.1 The C.B.E.C. has clarified vide Circular No. 97/ 8 /2007, dated 23-82007 that:

(a) Some transporters provide ‘Express Cargo Service' by undertaking door- to-door transportation of goods or articles with assurance of timely delivery. The nature of service provided by ‘Express Cargo Service' provider falls within the scope and definition of Courier Agency and not Cargo Handling services.

(ii) “Angadia” undertakes delivery of documents, goods or articles received from a customer to another person for a consideration. Hence, they are covered within the definition of Courier Agency and not Cargo Handling services.

10.2 CBEC Circular F.No.334/1/2008-TRU dated 29.2.2008 clarifies that Cargo Handling service does not cover mere transportation of goods. Mere transportation of goods by road is covered under ‘Goods transport agency service’. Service providers, commonly known as packers and movers provide services of packing together with transportation, with or without other services like unpacking, loading, unloading etc. Such composite services, at present, are classifiable under Cargo Handling service or Goods Transport Agency service depending upon their essential or predominant character of the services provided. Packing with transportation will be classifiable under Cargo Handling service.