Answer Posted / adv. manish singh

“Clearing and forwarding agent” means any person who is engaged in providing any service, either directly or indirectly, concerned with the clearing and forwarding operations in any manner to any other person and includes a consignment agent.
The clearing and forwarding agents are engaged / appointed by manufacturer of goods (both excisable and non-excisable goods), producers and distributors of goods and shall also include such agents appointed for agricultural and mineral goods.

Normally, there would be a contract between the principal and the clearing and forwarding agent detailing the terms and conditions and also indicating the commission or remuneration to
which the C&F agent is entitled.

A clearing and forwarding agent normally undertakes the following activities:

(a)
receiving the goods from the factories or premises of the principal or his agents;
(b)
warehousing these goods;
(c)
receiving dispatch orders from the principal;
(d)
arranging dispatch of goods as per the directions of the principal by engaging transport on his own or through the authorized transporters of the principal;
(e)
maintaining records of the receipt and dispatch of goods and the stock available at the warehouse; Service Tax is payable on above services. (Ministry’s F.No.B43/7/97-TRU dt.11.07.1997)

If factories or persons are engaging brokers for sending their goods directly to their customers, on the basis of orders procured by them, services rendered by brokers would amount to services provided by a Clearing& forwarding Agents and would be liable for payment of Service Tax.

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