Clearing & Forwarding Service

“ Whether a person (agent) who has entered into an agreement with principal (owner) for handling and distribution of the products of the principal and entrusted with the job of receiving, storing and distributing the products of the principal to his authorised stockists and distributing centers is liable to pay Service Tax under the category of 'Clearing and forwarding Agent” when no clearing activity from the manufacturer's (Principal) premises is directly undertaken by the agent or
Service Tax is leviable under the category “Clearing and forwarding” only if an agent renders both clearing forwarding services"

P&H High court has held that it is the context in which the word “and” is positioned, being sandwiched between the words “clearing” and “forwarding” has to be looked into while interpreting the meaning. Like the legendary Trishanku, the word “and” is dangling between “clearing” and “forwarding”- neither divorcing from the Heavens, nor from the Earth. In such a positioning, it is not possible to segregate the holistic concept of 'clearing and forwarding” into divisible activities, either or both of which can be provided for answering the customers'
needs.”

Hence person not engaged in clearing activity is not a C&F Agent.