News Flash
  • Tender For Supplying Of A Fountain With Installation & Commissioning.. Click Here
  • Training on Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, through Video Conferencing on 16th September from NACIN, Faridabad . Click Here
  • Corringendum dated 06.09.2019 for waiver from mentioning UIN on invoices extended upto 31st March 2020
  • Adjudication of Show Cause Notices issued by DRI, DGCEI, SIIB, Preventive etc in light of the judgment in the case of M/s Mangali Impex. Click Here
  • Prospective Training Report to be conducted by NACIN and its Zonal Campuses for the month of September, 2019 Click Here
  • The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019,(SVLDRS) application has been made available online at https://cbic-gst.gov.in from 1-9-19. The declaration under Section 125 of the Finance (No. 2) Act, 2019 can now be made electronically in Form SVLDRS-1 by the declarant
  • Revision of the existing guidelines for grant of financial assistance for setting up/ refurbishing of Departmental Canteen/ Kitchenette - reg. Click Here
  • Request for Proposal for running Service Centers at various Customs EDI locations is available on http://eprocure.gov.in/eprocure/app Last date for submitting the bids is 18th October 2019. Click Here
  • One-Day Training on "Right to Information Act, 2005" for Group 'A' officers of CBIC on 27th September, 2019 at NACIN, Faridabad Click Here
  • Three-days training on Audit in GST from 18th to 20th September, 2019 at NACIN, Faridabad for Group 'A' and 'B' officers of CBIC . Click Here
  • Launching of Awareness of GST awareness Campaign - Manthan Programme for GST Click Here
  • Removal of difficulty order regarding extension of due date for filing of Annual return (in FORMs GSTR-9, GSTR-9A) and reconciliation statement (in FORM GSTR-9C) for FY 2017-18 till 30th November, 2019 issued.
  • Scheme for Grant of Cash Award to Meritorious Children of Departmental Officers/Staff for their performance in Board Examination -2019 Click Here
  • Recruitment Rules for the post of Superintendent of Central Excise under CBIC Click Here
  • Tender notice for replacement of false ceiling alongwith lights. Click Here
  • Notice regarding Customs Brokers Examination, 2020. Click Here
  • Two-Days' Training Programme on "Preservation of Heritage Buildings" on 16th & 17th September, 2019 for Group 'A' officers of CBIC at INTACH Heritage Academy, (INTACH Headquarters), 71 Lodhi Estate, New Delhi. Click Here
  • The central government notifies that the Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDRS), 2019 will come into effect w.e.f 1st September, 2019 till 31st December, 2019. Click Here
  • The Central Government notifies the Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDRS) Rules, 2019 Click Here
  • CBIC enhances monetary limits for filing departmental appeals in legacy matters in CESTAT, High Courts and Supreme Court. Click Here
  • CBIC has started issuing Generic Icegate Email Ids to field formations. For more information, Please Click Here
  • Reversion of the posts of Principal Commissioner/Commissioner of CBIC- For details Click Here
  • Updated versions of GST - Concept and Status, and GST - An Update as on 01/08/2019 have been uploaded
  • Residential Course on "Financial Intelligence and Investigations" for Officers of CBIC at IIM,Bengaluru from 16th to 27th September, 2019Click Here
  • DG's letter on the identification and execution of the Swachhta Projects for the financial year 2019-20.Click Here
  • To decide eligibility of candidates appearing for Departmental Exams to be conducted by NACIN in 2019-2020, CCAs may refer Recruitment Rules and Annual Examination Calendar 2019-2020. This clarification can be viewed through this linkClick Here
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