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The government has effected a change in the mode of service tax payment from September 1. It has shifted the burden of service tax payment to the clearing and forwarding agents instead of the person engaging in such clearing and forwarding agent.

The levy of service tax on services rendered by clearing and forwarding agents was introduced with effect from July 16, 1997. The levy applies to clearing and forwarding agents who undertake, inter alia, services of receipt, warehousing, despatch, record maintenance and account of goods on behalf of the principals who appoints or engage such agents.

Earlier the person who engaged the services was made liable to pay service tax. Now, in parity with other taxable services, under the changed method of payment, the service tax will be payable by forwarding and clearing agent themselves _ that is the person providing the services. Consequently, provisions relating to registration, furnishing of returns and assessment as in existence will apply on the clearing and forwarding agents who will be liable to pay the service tax.