Indian Service Tax
Courier Agency
Effective Date: 01/11/1996
Authority: Notification No. 6/96-ST, dt. 31/10/1996 (for full text of Notification see under'Advertising Agency').
Rate of Service Tax: 8% from 14-5-2003 (5% upto 13-5-2003). 10% from 10/9/2004 - Cess 2% of 10% = 0.2. Total ST = 10.2%.
Definition
"Courier Agency" means a commercial concern engaged in the door-to-door transportation of time-sensitive documents, goods or articles utilising the services of a person, either directly or indirectly, to carry or accompany such documents, goods or articles; [Section 65 (33).
Taxable service
Courier services provided by a Courier Agency to a customer in relation to door to door transportation of time-sensitive documents, goods or articles.
Value of taxable service: Gross amount charged by Courier Agency from the customer in relation to courier services.
Exemptions
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See Chapter on "General Exemptions"
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Specific exemptions
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EMS, speed post
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Container/lorry services
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Postal services including VPP
Person liable to pay: Courier Agency.
Head of Account
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Questions & Answers
Q. 1 What is a 'Courier Agency' ? What is the taxable service provided by them?
Ans. Courier Agency means a commercial concern engaged in the door to door transportations of time sensitive documents, goods or articles, utilising the services of a person either directly or indirectly to carry or accompany such documents, goods or articles. Services provided by a Courier Agency to their client in respect of door to door transportation of time sensitive documents, goods or articles constitute taxable service for the purpose of the levy of service tax.
Q. 2 What is the value of the taxable service in relation to Courier Service?
Ans. Value of the taxable service in relation to Courier Service is the gross amount charged by such agency from the customer for services in relationtodoor to door transportation of time sensitive documents, goods and articles.
Q. 3 Is the facility of Centralised registration available to Courier Agencies?
Ans. It was originally provided that a Service Tax assessee has to obtain separate registrations in respect of the offices or premises where from they would be carrying on their business. However, in the case of courier agencies, facility of centralised registration and collection has been extended. A detailed procedure also has been set down for the same. This facility has now been extended to all services wherever Centralised billing pattern is followed
Q. 4 Are services provided by 'Co-loader' chargeable to Service Tax separately?
Ans. No, as 'Co-loader' is a company whose services are engaged by a Courier Agency for handling part of the job for delivery of articles, goods, documents, etc. they are not providing any direct service to the customer. The client is concerned only with the Courier Agency, for the services and the co-loader is only a sub-contractor.
Q. 5 Is any courier agency undertaking comprehensive business and providing integrated transportation, warehousing, packing, inventory management etc. liable to pay Service Tax in respect of services provided by them in relation to warehousing, packing, inventory management, etc.
Ans. Yes, wherever the above facilities are relatable to door to door transportation of documents, goods and articles and are undertaken by the courier agencies themselves, the charges for such facilities are correctly includible in the gross amount.
Q. 6 Are 'Express Cargo Service' provider, who assure delivery of documents, goods or articles within stipulated time period, liable to pay tax as Courier Agencies?
Ans. Yes. The nature of service provided by these Express Cargo Transporters is the same as the services provided by the conventional courier agencies. Therefore, these Express Cargo Services are also liable to pay Service Tax.
Q. 7 Do the Speed Post services provided by Department of Post attract Service Tax?
Ans. No. Since the Department of Post is not a commercial concern, the Speed Post services provided by it do not attract Service Tax.
Q. 8 Are the Angadias liable for payment of Service Tax ?
Ans. Yes, Angadias engaged in commercial activities such as undertaking of delivery of the documents, goods, or articles received from the customer to other end, are covered by the definition of" Courier Agency" and are liable to pay the Service Tax on the value of services provided by them.
Q. 9 Is there any exemption from payment of Service Tax on services provided by Courier agencies?
Ans. Yes, the services provided by the Courier Agencies to United Nations, certain International Organisations and specified Diplomatic Missions are exempted from payment of service tax.
(Authority: Notification no. 45/98 dated 22/01/98 , 44/98 dated 22/1/98, 47/98 ST dated 24/4/98)
[Source CBEC Website]
Main text of Departmental Circular/TN
[TN No. 271/68/97, dated 7-11-1997 of the Nagpur Commissionerate]
Attention of Trade is invited towards this Commissionerate Trade Notice No. 191/67/96, dated 9-12-1996 regarding imposition of Service Tax on Courier, Advertising and Paging agencies.
As per Section 65(12)* "Courier Agency" means a commercial concern engaged in the door-to-door transportation of time sensitive documents, goods or articles utilising the services of a person, either directly or indirectly, to carry or accompany such documents, goods or articles. Therefore any commercial concern engaged in the activity described herein above is a courier agency for the purpose of Section 66 of the Finance Act, 1994 (as amended). It is not relevant whether such commercial agency calls itself courier agency or not, what is of significance is that once the activities of the assessee concerned falls within the definition of the term "Courier Agency" the assessee is liable to pay the service tax on the service provided by him.
"Angadia" is engaged in commercial activities - undertakes to deliver the documents, goods or articles received from customers to other end. For this purpose they are charging service charges from customers for the services rendered by them. "Angadia" are very much covered by the definition of "Courier Agency" and are liable to pay the service tax on the services provided by them.
Request for service tax exemption on courier/angadia service or lump sum payment of service tax has also been examined, but it has not been found possible to do so. Further, to pay a fixed percentage of tax on gross amount does not require much accounting skill.
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