Service Tax - Wharfage charges collected by Gujarat Maritime Board, not taxable under ‘port services' - SC
SECTION 65(82) defined "port service" as:-
"Port service" means any service rendered by a port or other port or any person authorized by such port or other port, in any manner in relation to a vessel or goods;"
The Supreme Court, yesterday held that the wharfage charges collected by Gujarat Maritime Board, not taxable under ‘port services'.
Gujarat Maritime Board ("GMB") is a statutory body constituted under the Gujarat Maritime Board Act, 1981. This authority administers and operates minor ports in the State of Gujarat. GMB entered into an agreement dated 28.2.2000 with Larsen & Toubro which ultimately became M/s Ultratech Cement Limited ("UCL") whereby a licence was granted to UCL to construct and use a jetty for landing of goods and raw materials manufactured by UCL in their cement factory which was situated close to the said jetty at Pipavav port. The Department alleged that service tax was payable on wharfage charges by GMB collected by them from their licensee UCL under the taxable category of "port services".
The Supreme Court observed,
It is the Board itself that charges or recovers wharfage charges from the licensee, UCL and does not authorize UCL to recover such charges from other persons. This being the position, it is clear that no service is rendered by a port or by any person authorized by such port and, therefore, the very first condition for levy of service tax is absent on the facts of the present case. So far as the direct berthing facilities provided for captive cargo is concerned, the lease rent charged for use of the waterfront also does not include any service in relation to a vessel or goods and cannot be described as "port service".
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