The storage of goods in a port or customs and excise airport or on land adjacent to a port or an international railway area or a temporary storage facility, is zero-rated when supplied in connection with a specific movement of goods that have been or are to be carried in any ship, aircraft or railway vehicle, for …
Is demurrage a tax?
The Federal Inland Revenue Service considers demurrage as an income chargeable under the CITA while shipping companies regard it as part of shipping income earned in respect of inbound operation which should not be taxed, as inbound freight income is not taxable in Nigeria.
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?
Is GST applicable on detention charges? If yes, what is the rate? A. Yes, GST of 18% is applicable on detention charges per Government notification.
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.
What is a demurrage fee?
Demurrage is a charge applied to shipments left in a terminal after the allotted free time. Every commercial shipper will likely run into demurrage charges at some point. And while charges vary from terminal to terminal, the average cost of demurrage continues to rise year after year.
Is TDS applicable on cargo services?
But if the transporter owning more than 10 goods carriages at any time during the year, then you, as payers are liable to deduct TDS at the time of paying charges to goods transporter at the rate of 1% or 2% as the case may be; based on the transport contractor’s status.
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.
Who is responsible for demurrage charges?
Only the owner of the goods or person entitled to the goods is liable to pay storage or demurrage charges to the port trusts and not the ships or its agents known as steamer agents, the Supreme Court has ruled in a judgment that settles a long-standing conflict within the shipping industry over the matter.
How do you fight demurrage charges?
Tips to Avoid or Reduce Demurrage Charges
- Pre-clear your cargo and issue delivery instructions to your inland carrier in advance.
- Have a trucker “back-up” plan.
- Request extended free time.
Can a demurrage charge be deducted from income tax?
The Kolkata bench of the Income Tax Appellate Tribunal, recently ruled that the demurrage charges and penalty charges paid by a contractor to the Companies for violation of the contractual terms are allowable as deduction under section 37 (1) of the Income Tax Act, 1961.
How much does it cost to demurrage a shipment?
The demurrage for a given shipment is $60,000 PDPR. The shipment has exceeded the allowable laytime by two and a half days. The total demurrage charges equal $60,000 x 2.5, or $150,000. If a shipment accrues demurrage charges, the importer will likely need to pay them before picking up the goods.
When do you get charged with demurrage and detention?
You run into demurrage and detention charges when you’re running late with your containers. From the day you exceed your number of free days, demurrage and detention charges will be added. They will every day until you deliver the containers back to the allocated destination.
What’s the difference between demurrage and storage charges?
While both terms refer to fees charged when an unpacked shipment exceeds the allowable free time, demurrage charges are levied by the shipping company and storage charges are levied by the port. Ports charge storage fees to discourage delays and reduce congestion at busy terminals.
