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No.14/005/065/2004
Sept 21, 2004
Members of the Council
Dear Members
Sub: Service Tax on Transport of Goods by Air
As you are aware, with the enactment of Finance Bill (No.2), 2004 on Sept 10, 2004, twelve new services have come under the purview of the Service Tax net. The Service Tax on taxable services will be levied at 10%. Education Cess @ 2% on the Service Tax would also be leviable on taxable services.
One of the new services notified pertains to 'transport of goods by Air'. The services provided by an aircraft operator (i.e. commercial concerned like an airlines) in relation to transport of goods by aircraft falls under this category.
However, we wish to inform that Ministry of Finance recently issued a Notification No.28/2004 dated Sept 17, 2004 exempting Service Tax on transport of goods by Air in relation to export cargo (Notification copy attached).
By virtue of this Notification, transport of Export Cargo by Aircraft will not attract Service Tax.
This is in line with the announcement made in the National Foreign Trade Policy 2004-09 that all goods & services exported, including from DTA units, shall be exempt from Service Tax. Members may take note of this particular favourable measure taken by the Government for promoting export.
Thanking you,
Yours faithfully
K Abdul Sattar Khan
Asst Director
Notification No.28/2004 dated Sept 17, 2004
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