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S.T. Circular No. 39/2/2002.
20th February, 2002

Government of India
Ministry of Finance
Department of Revenue
(Central Board of Excise & Customs)

Subject: Service Tax on Clearing & Forwarding Agents – Clarification reg.

It has been brought to the notice of the Board, that certain doubts have emerged, whether, Service Tax is leviable on ICDs/CFS dealing with import/export cargo as “C&F agents”. In this regard, the matter is clarified as under.

2.            As defined under Section 65 (16) of the Finance Act, 1994 “C&F agent” means any person who is engaged in providing any service, either directly or indirectly, connected with the clearing & forwarding operations in any manner to any other person and includes a consignment agent. As per clause(j) to Section 65 (72), taxable service means, any service provided to a client by a clearing and forwarding agent in relation to clearing and forwarding operations in any manner.

3.            Normally C & F agents do the job of clearing and forwarding. In a typical situation clearing & forwarding agents are appointed in outstation location by manufacturers or wholesale distributors so that they may clear the goods, store them and then forward the goods according to the instructions of the Principal owner. Thus the person concerned is an agent and an agent is an authorised representative of a named principal owner.

4.            There is a contract between the principal (owner) and C&F agent detailing the terms and conditions and also indicating the commission or renumeration to which the C&F agent is entitled. Therefore, ICDs/CFS can not be considered as C&F agents on the following grounds:

(i)    There is no agreement or contract between service Provider (ICD/CFS) and Service receiver (importer/exporter);

(ii)    ICDs/CFS are functioning under authority of Govt. of India and not for any principal or owner (importer/exporter).

5.            It is also clarified that, so far as domestic handling of cargo by the container Depots is concerned, (like CONCOR), their case may be examined separately. If they do not meet the parameters mentioned in Board’s letter F.No.B/43/7/97-TRU dated 11.7.97, they will also not be considered as C & F Agents.

6.            Suitable Trade notices may be issued for information of the trade.

7.            Field formations may be advised suitably.

8.            Receipt of this Circular may please be acknowledged.

9.            Hindi Version will follow.


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