Ocean Freight Markup not Subject to Service Tax: CESTAT

Ocean Freight Markup Not Subject to Service Tax: CESTAT The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that the markup on ocean freight is not subject to service tax. This decision was made in the case involving Balmer Lawrie & Co. Ltd., where the company was charged service tax on the differential amount between the actual ocean freight paid and the amount charged to customers. The tribunal held that the differential amount does not constitute a service and, therefore, is not liable for service tax. This ruling aligns with previous decisions that have clarified the scope of service tax applicability on ocean freight. The decision provides relief to companies involved in international trade, as it reduces the tax burden on ocean freight charges. It also clarifies the interpretation of service tax laws concerning freight charges, ensuring that only actual services rendered are taxed.