Dear Friends,

Please clarify the following

We are in to manufacturing and importing raw material  from various 
destinations of globe.  We negotiate with Freight Forwarders for picking up the 
material on our behalf.  The Freight Forwarders pick the shipments on regular 
basis depending upon the availability of the material, by Air and bills us at 
pre contracted charges. The choice of airline to be used is with the Forwarder 
depending upon the time of availability of shipment and the connecting flights.

Upon arrival of cargo, the Freight Forwarder, issues us Cargo Arrival Notice 
Cum Invoice and claims the contracted charges from us in rupees only. The 
Freight Forwarder charges us Service Tax only on the Delivery Order charges and 
not on either Freight charges or collection fee. The custodian of cargo at 
customs hands over the material to us only after producing the original 
Delivery Order and completion of customs formalities.

Now, my query is who has to pay the Service tax on Air Freight Charges?   
Since, Importing the goods by Air Services are chargeable to service tax as per 
Sec 65 (105) (zzn).


RAGHAV.


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