| This is a strange case. One of my clients is a small mailing agency. It franks the postage (using the licensed franking machines) on the letters of its clients and claim reimbursement of postage franked and service charges for franking in separate bills. Service tax is levied on the bill for service charges while no service tax is levied on the bill for the actual postage franked. The Service tax authorities insist that service tax is due on the amount of postage franked also as it is reimbursed. The postage is defined in the Indian Post Office Act as "Government duty (like Customs duty) for transmitting mail by the Postal Department". In my opinion, no service tax is due on the postage as it is only a government duty (as customs duty). Is my stand correct? S. Krishnamoorthy
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