Is demurrage subject to VAT?
By Isabella Wilson
Being incidental to the trade or business of the international carrier, demurrage fees should instead form part of the Gross Philippine Billings (GPB) subject to 2.5% tax under Section 28. Further the law did not expressly impose 12% VAT on the domestic portion of the services rendered by international carriers.
Is TDS applicable on demurrage charges?
However, the AO disregarded the contention of the assessee and held that the payment made to the foreign shipping companies on account of demurrage charges are representing the rent. Therefore, the assessee was liable for deduction of TDS u/s 194-I of the Act.
Is GST payable on demurrage charges?
A. Yes, GST of 18% is applicable on detention charges per Government notification.
What is demurrage charge?
Demurrage charges are applied for storage of laden containers whilst in OOCL’s care in a port, rail terminal, feeder terminal, inland depot or container yard. Demurrage is applied after a designated free time.
How do you calculate demurrage?
In the calculation of demurrage amount payable to shipowner, demurrage rate is multiplied by the number of days or part of day in excess of the agreed laytime. For example: Total Laytime Allowed 11 days. Demurrage Rate $60,000 per day pro rata (PDPR)
What is free time in shipping?
“Free time”: the period of time offered by the Carrier to the Merchant free of charge, covering both demurrage period and detention period, beyond which additional charges such as, but not limited to demurrage and detention charges, will be due to the Carrier.
What is demurrage and detention charges?
Demurrage refers to the charge that the merchant pays for the use of the container within the terminal beyond the free time period. Detention refers to the charge that the merchant pays for the use of the container outside of the terminal or depot, beyond the free time period.
Is TDS applicable on Labour charges?
TDS on labour charges is required to be deducted under Section 194C of Income Tax Act 1961 at the rate of 1% or 2% (as the case may be) for payments to residents.
Who is responsible for demurrage charges?
1. Who is responsible for demurrage charges? In the case where goods are being imported, a Demurrage fee is charged by the port authority to the importer. For exports, when the loaded containers are not transported within the given laytime, a Demurrage fee is charged by the port authority to the shipping line.
Are demurrage charges penalties?
Demurrage charges are effectively penalty charges. They are applied to all types of vessel whether it be in a port, feeder terminal or container yard. The charges are applied after the free allotted time has run out.
How do you avoid demurrage charges?
Top 5 Tips to Reduce Demurrage, Detention and Storage Charges
- Make Sure Your Cargo is Ready on Time to Reduce Detention Charges.
- Be Smart About Customs Clearance to Reduce Demurrage and Storage Charges.
- Use the Expertise of a Freight Forwarder.
- Demand Demurrage, Detention and Storage Information in Your Quotation.
How are demurrage charges calculated?
Demurrage, Detention and Port Charges calculation scenario
- Demurrage free days offered by the shipping line = 7 days.
- Detention free days offered by the shipping line = 10 days.
- Free days at port = 3 days.
What is the GST on Labour charges?
What is the GST rate with the HSN code on labour charges?
| Service Accounting code | Nature of service | GST rate for labour charges |
|---|---|---|
| 998516 | Temporary staffing-to-permanent placement services | 18% |
| 998517 | Co-employment staffing services | 18% |
| 998518 | Other employment and labour supply services nowhere else classified | 18% |
How is TDS calculated on contract?
TDS is required to be deducted @1% on the whole amount as the total payment in the year exceeds Rs 75,000. Example 2 – In the above example if the contractor A is a Partnership Firm in place of individual. TDS is required to be deducted @ 3% as the sum exceeds the threshold limit of Rs 30,000 in single payment.
Who should pay demurrage charges?
The shipper is generally responsible for demurrage charges, but the consignee also may be legally obligated to pay, depending upon who was at fault for the delay and which party was contractually responsible to pay freight or other charges.
Do you have to pay GST on Labour?
Employees’ wages and salaries are not subject to GST. Consequently, there is no impact for payroll tax purposes.
Do I need to pay GST as a contractor?
Contractors may also need to register for GST. As a contractor, you have to register for GST if your GST turnover is at or above the GST turnover threshold of $75,000 (exclusive of GST) and $150,000 (exclusive of GST) or more for non-profit organisations.
