News Flash
  • CGST Rules, 2017 as amended upto 18/10/2017 have been uploaded.click here
  • Circular clarifying movement of goods on approval basis has been issued
  • Circular on Authorized officer for enrolment of Goods and Services Tax Practitioner has been issued
  • 3 CGST Notifications related to export package issued
  • Circular clarifying movement of goods on approval basis has been issued.click here
  • Circular on Authorized officer for enrollment of Goods and Services Tax Practitioner has been issued.click here
  • Notification 26/2017-Central Excise (NT) dated 17-10-2017 and circular 208/6/2017-Service Tax dated 17.10.2017 have been issued regarding redistribution of cases pending with Commissioner (Appeals) on 30-6-2017.click here
  • Results for THE DEPARTMENTAL EXAM FOR PROMOTION OF MINISTERIAL OFFICERS TO THE POST OF EXECUTIVE ASSISTANT (STA) / INSPECTORS OF CENTRAL EXCISE / INSPECTORS OF CUSTOMS (EOs & POs) held in the month of August 2017, have been declared and sent to the respective CC Zones & Commissionerates.
  • List of ports and ICDs wherein e-seal readers are to be provided by the vendors-.click here
  • New Notifications issued under CGST Act, 2017, IGST Act, 2017 and UTGST Act, 2017.click here
  • The Customs heritage Half Marathon to be held at Mumbai on 29.10.2017.The last date for registration is 22.10.2017.click here
  • Upkeep & Safety of equipment-UPS provided by CBEC.click here
  • No extension of last date for filing GSTR-1 for July, 2017.click here
  • Defence against Writ Petitions/PILs relating to GST-regclick here
  • Press realease on 22nd GST Council Meeting dated 06.10.2017.click here
  • GST rates approved by GST council on 06/10/2017.click here
  • Press note export packages.click here
  • Press note on decisions taken by GST council in 22nd meeting on 06/10/2017.click here
  • All CCs/DGs are requested to check online the "PPT on best practices on Swachhta"by the formations under CBEC.click here
  • Circular on Bond/Letter of Undertaking for exports issued.click here
  • Notification on extension of facility of LUT to all exporters issued.click here
  • Details of Vendors providing E-seals to exportersclick here
  • Eighth amendment to CGST Rules, 2017click here
  • Extension of time limit for intimation of details in FORM GST CMP-03click here
  • Incase of any LAN-WAN issues please call 18002662232/18001214560 or mail Saksham.Seva@icegate.gov.in
View all

Section 37 B Order No.2/1/2002-ST

F.No.137/04/2002 CX.4
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs

24th April, 2002.

37 B Order No.2/1/2002-ST

Subject:- Providing service of storage facility and charging rent for Storage of liquid cargo in tanks - whether liable to service tax as C&F Agents, - regarding.

      In exercise of the powers conferred under Section 37 B of the Central Excise Act, 1994 (as made applicable to Service Tax by Section 83 of the Finance Act,1994), the Central Board of Excise & Customs considers it necessary, for the purposes of uniformity in connection with classification of services, to issue the following instructions.

2.      Doubts have been raised as to whether service of storage facility and charging rent for storage of liquid cargo in tanks, provided by certain agencies, can be considered as a service provided by 'clearing and forwarding agents' or not.

3.      This matter was raised by four such agencies before the Mumbai High Court in Writ Petition Nos.170/2002, 171/2002, 2962/2001 & 2994/2001. The petitions were disposed of by Hon'ble Court with directions to the Central Board of Excise & Customs to pass appropriate speaking clarification and/or, orders after hearing the petitioners.

4.      The agencies were accordingly heard in the matter on 19th March, 2002 and on 3rd April.

5.      Views of DGST and concerned Commissioners of Central Excise have also been obtained.

6.      It is observed that the above agencies are engaged in the activity of providing storage (tanks) facility for liquid cargo which has been imported or is intended for export. They charge rent for storage of liquid cargo deposited with them.

7.      It is observed that, as per Section 65 of Finance Act, 1994 'Clearing & Forwarding Agent' means "any person who is engaged in providing any service, either directly or indirectly connected with the clearing and forwarding operations in any manner to any other persons and includes a consignment Agent". Further, 'taxable service' with respect to C&F Agents means, any service provided to a client by a clearing and forwarding agent in relation to clearing and forwarding operations, in any manner.

8.      The issue is whether the activity/service of providing storage facility and charging rent, for storage of liquid cargo in tanks, can fall under the category of 'Clearing and Forwarding' operations as defined under Section 65 of Finance Act, 1994.

9.      The main point raised by the agencies is that they are not at all rendering any clearing and forwarding services and hence they do not come under the category of clearing and forwarding agents. They simply issue Invoices/Bills to their customers towards storage charges only and for no other charges.

10.      The matter has been examined. Normally, a C&F agent receives goods from the factories or premises of the Principal or his agents, stores these goods, despatches these goods as per orders received from the Principal or owner, arranges transport, etc. for the purpose and prepares invoices on behalf of the Principal. For this service, the C&F agents receives commissions on the basis of agreed terms. Therefore, an essential characteristic of any services, to fall in the category of C&F agent, is that the relationship between the service provider and receiver should be in the nature of principal(owner) and agent. The C&F agent carries out all activities in respect of goods right from stage of their clearances from the premises of the principal to its storage and delivery to the customers.

11.      However, in the cases under consideration, the agencies are providing only storage facility for liquid cargo which has been imported or is intended for export. They charge rent for storage of liquid cargo deposited with them. They are not connected with the vessel bringing the goods and are not concerned with customs formalities. They issue invoices to customers towards storage charges and for no other charges. These agencies are not receiving any commission from the principal but only rental for storage facility, whereas a C&F agent's remuneration is in the form of commission. The transactions between the parties are not transactions between principal and an agent but between principal and principal. These agencies are neither receiving any despatch orders from the owners of the goods, nor are they arranging for the despatch of goods as per their directions by engaging transport, as is done normally by C&F agents. They are also not carrying out any service directly or indirectly in connection with clearing and forwarding operations. Therefore, services rendered by such agencies, in relation to storage of cargo, can not be considered to be in the nature of 'clearing and forwarding' agent and such agencies cannot be considered as "clearing and forwarding agents".

12.      However, under the Finance Bill, 2002 "storage and warehousing services for goods including liquids and gases" is proposed to be made to liable to service tax. Section 65 (87) of the proposed amended Finance Act, 1994, defines "storage and warehousing" to include storage and warehousing services for goods including liquids and gases but does not include any service provided for storage of agricultural produce or any service provided by cold storage. Therefore, as and when these provisions of the Finance Bill come into effect the above types of cases shall be liable to service tax under the head "storage and warehousing".

13.      Suitable Trade notice may be issued for information of trade and field formations.

14.      The receipt of this order may kindly be acknowledged.

15.      Hindi version will follow.

A.K.Prasad
Director (CX.4)
Tel: 3012812
Fax: 3792965