Representation has been made for seeking clarification on levy of Service Tax on the services by way of transportation of goods by a vessel from a place outside India to the customs station in India with respect to goods intended for transshipment to any country outside India. In this regard, CBEC has issued Circular no. F.No.354/42/2016-TRU dated 16.02.2017.
It clarifies that Service Tax shall not be levied on transportation of goods by vessel, intended for transshipment to country outside India. As by applying the Rule 10 of POPS, 2012 the place of provision of services of transportation of goods by air/sea, other than by mail or courier, is the destination of the goods. Thus w.r.t. the imported goods in India intended for transshipment to any other country outside India, the destination of goods is not a place in taxable territory in India but, a country other than India if the same is mentioned in the import manifest or the import report as the case may be and the goods are transshipped in accordance with the provisions of the Customs Act, 1962 and rules made there under. Hence, with respect to such goods, services by way of transportation of goods by a vessel from a place outside India to the customs station in India are not taxable in India as the destination of such goods is a country other than India.
Click here for the circular st-circ-204-2-2017_Goods transhipment in other country