The Goods and Service Tax (GST) had provided 5% IGST on services of “Transport of goods in a vessel including services provided or agreed to be provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India”
The GST Notificaiton No. 10/2017 – Integrated Tax (Rate) also made the tax payable on Reverse Charge Basis (RCM) vide sr. no. 10 of the notification in hands of Importer as defined under the Customs Act, 1962
Now, in response to various legal cases and Supreme Court judgement in the matter, the government has notified to omit the entry at sr. no. 10 from the above notification of RCM.
GST Notification No. 13/2023 – Integrated Tax (Rate) dated 26.09.2023 has been issued for the same. The notification would come into force from 01st October, 2023.
Thus, providing a relif to the importers from paying IGST on Reverse Charge Basis on the ocean freight component especially under CIF / CFR contracts.
It must be noted, However, Importer still has to pay IGST at the time of Import along with other Import duties at the time of filling Bill of Entry when goods are imported into India.
Importers may refer the notifications for further details.
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