why they are charging service tax on the courier also?

Question

some many online shopping websites are there in the internet.
when we order any items online they will charge the shipping/courier extra such as Rs.30, 50 etc., and on that also they are charging service tax. But i think already service tax will be included in that courier amount 30 or 50 etc., then why they are charging extra. Is that amount was paying to the government or not

as told by sanjay i also accepted that service tax will be there on the couriers, but that will be included in that amount 30 or 50 or 100. For suppose if u go to courier agency they will charge only 100 but not 112.

here the readers are not understanding the question correctly. I also agree that service tax can be charged on couriers.
But here the question is regarding online shopping websites. For example we purchase a mobile from the online website and if the mobile cost is Rs.2000 and shipping charges are Rs.150 and finally total bill they charge Rs.2413. But as per the rules service tax for courier was already included in the Rs.150 and final bill should be Rs.2395. then why there are charging service tax on shipping costs also?

Answer 1

Service Tax is applicable to many services and Courier Service is one among them. This Tax is collected by Central Government thru Central Excise and Customs Department.

The Service Tax is normally charged to the customer by the service providing agency.

The present rate of Service Tax is 12% and Education Cess of 2% is charged on Service Tax.

Hence on availing a service of RS.100.00 for courier service you have to pay Rs.12.00 as Service Tax and Rs.0.24 as Education Cess.

So the courier company charges Service Tax in addition to their normal service charges. The amount collected is paid to the government regularly.

Answer 2

The Service tax collected is the revenue for the Government. The Government also needs funds for maintaining the roads/street lights, construction of public bathrooms etc.
Who will give money for all these Government expenses. The Government collects only a small percentage only as taxes compared to the expenses on the courier.

Answer 3

The charges paid for courier are the charges for that particular agency & the amount of Service Tax charged on that amount is paid by that agency to Government. So, they can't get any benifit of that S.Tax amount. If you are Company having registration under Central Excise or Service Tax, then you can avail the credit of that S.Tax. i.e.set off

Answer 4

u r rite,
the website ppl are cheating the people in this context thats what it seems to me.
The courier rate should be quoted including the service tax and it should not be calculated separetly.
The courier company provides the services including the service tax and it has nothing to do with the website selling the product unless they are shipping by there own network and not thru a third party courier service.

Answer 5

It is for the courier comapany to decide how to bill.They can charge service tax as extra as 100+ 12.24%.
If they charge only 100 then that is treated as total inclusive of service tax and their liability calculated accordingly.

Answer 6

THE FINANCE ACT, 1994
(as amended)

Service Tax



64. Extent, commencement and application.

(1)


This Chapter extends to the whole of India except the State of Jammu and Kashmir.

(2)


It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

(3)


It shall apply to taxable services provided on or after the commencement of this Chapter.


(29)


“ commissioning or installation agency” means any agency providing service in relation to erection, commissioning or installation;

(30)


"computer network" has the meaning assigned to it in clause (j) of sub-section (1) of section 2 of the Information Technology Act,2000 (21 of 2000);

(30a)


“construction of complex" means—






(a)


construction of a new residential complex or a part thereof; or






(b)


completion and finishing services in relation to residential complex such as glazing,

plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal

joinery and carpentry, fencing and railing, construction of swimming pools, acoustic

applications or fittings and other similar services; or






(c)


repair, alteration, renovation or restoration of, or similar services in relation to, residential

complex;



(31)


"consulting engineer" means any professionally qualified engineer or an engineering firm who, either directly or indirectly, renders any advice, consultancy or technical assistance in any manner to a client in one or more disciplines of engineering;

(32)


"convention" means a formal meeting or assembly which is not open to the general public, and dose not include a meeting or assembly the principal purpose of which is to provide any type of amusement, entertainment or recreation;

(33)


"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;