MUMBAI: In order to avoid claims and disputes ending into long standing legal battles, Mumbai and Nhava Sheva Ship Agents Association has appealed to the Central Board of Excise and Customs to withdraw the notification 1/2017, 2/2017 & 3/2017 on service tax completely or defer to Oct 1.
In a letter addressed to Najib Shah, Chairman of CBEC, MANSA said, “The implementation of such taxation countervails the Governments earnest efforts in achieving ease of doing business lest it might lead to loss of business to Indian Enterprises. It may be noted that the meagre earnings the Ship Agent realized for attending and rendering services to the ships are far below the required level of resources for meeting the payment of the prescribed Service Tax as proposed.”
The association has called for full deliberation and requested to issue sufficient advance notice (say 3 months) to the Principals/Owners of the vessels as well as all other stakeholders in general as in some cases the International Trade have Contracts signed for a whole financial year from April to March taking into account the prevailing tax structures and liabilities.
The ships are chartered or run as Tramp basis after signing the Contracts keeping in view all the liabilities on the cargo to be transported, the letter said.
The effective date of service tax levy as per the proposed three notification is January 22, 2017, which does not take into account the consignments in pipeline or transit.
The Importers are already clamoring about the high import freight rates and the excessive transaction costs. The proposed levy of Service Tax might add fuel to the fire and Ship Owners may not be able to offer economic freights for transacting to/from India under the prevailing lean period for shipping and it may result in discouraging Ship Owners / Lines for Indian Export-Import cargo.