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Informative

Relief for Shipping Corporation of India: CESTAT Rules Demurrage is Part of Exempt Transport Service, Quashes ₹49.44 Cr Service Tax Demand

Update / Judgement Date

17 Aug 2025

Source

Taxscan

Author

Team — WCP Legal Desk

Reading Time

1 min read

Corporate Law & GovernanceExcise, VAT & Custom

The CESTAT has provided relief to the Shipping Corporation of India, ruling that "demurrage is part of an exempt transport service" and has quashed a ₹49.44 crore service tax demand. The tribunal's decision provides a significant victory for the company. The ruling clarifies that a service that is incidental to an exempt service is also exempt. This judgment is a crucial precedent for other cases.