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Hearing on INSA's petition adjourned to July 31
July, 04th 2006

The Bombay High Court on Monday adjourned till July 31, the hearing on the writ petition filed by the Indian National Shipowners Association (INSA) in connection with the claims issued by the Director General of Central Excise Intelligence (DG-CEI) to pay service tax retrospectively from August 2002 to March 2006.

After the DG-CEI slapped summons on shipping companies, seeking full details of their foreign exchange payment, including dry docking expenses at foreign ports during this period, INSA filed a writ petition before the High Court last month. INSA, in which all shipping companies are members, is seeking reversal of the DG-CEI order.

Industry sources said the net service tax for the retrospective period would come to a total of nearly Rs 80 crore to Rs 100 crore, especially as 2004-05 was a boom time for the industry and ships underwent extensive dry-docking at foreign ports.

The DG-CEI move came shortly after the Government came out with some clarifications earlier this year on the issue of service tax payable by the shipping companies. While these clarifications gave clear exemption to shipping companies from paying service tax on services consumed outside India, the issue of payment of the tax for the period August 2002 to March 2006 was left untouched.

In its writ petition, INSA has also brought out the issue of extra-territorial jurisdiction of the tax authorities.

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