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Service Tax and GST onOcean Freight, Service Tax

Issue Id: - 113479
Dated: 14-3-2018
By:- Prashant Gupta
Service Tax and GST onOcean Freight

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Recently in my final audit of Excise and Service Tax for pre GST era, I was taxed for Ocean Freight for the period 23rd April 2017 to 30th Juna 2017.

I was aware of notification of 1/2017 & 2/2017 of Service Tax Act but was not aware of notification no 16/2017 which transfers the liability on the Importer.

Not GST is also payable on it on RCM.

I just want to ask that don't you think that this is double taxation.

When we have pade custom duty and Excise/GST on CIF value of our goods imported than why shall we pay again Service Tax/ GST on F part of this CIF value.

Can you please explain the matter.

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Posts / Replies

Showing Replies 1 to 13 of 13 Records

1 Dated: 15-3-2018
By:- rajkumar shukla

issue is not clear.. which tax was paid on ocean freight?

2 Dated: 15-3-2018

Service tax has to be paid on ocean freight under RCM from April 23. If you are aware of freight amount, then service tax @15% to be paid on same or else if freight is not known then you have to pay service tax @1.40% + Sbc and kkc of CIF value. The same is taxable in GST also @5% on 10% of CIF value.

3 Dated: 15-3-2018
By:- Prashant Gupta

@CS Sanjay Malhotra

Sir with you due respect don't you think that this is double taxation

Once you pay custom duty as well as GST on CIF value

Then again you are paying GST on F value

4 Dated: 16-3-2018
By:- rajkumar shukla

A valid point has been raised by you. However this is continuing since service tax regards double taxation the first time ocean freight is subject to IGST under customs Act as a part of customs duty. Igst payment on ocean freight under 10/2017 is under Igst act and I feel taxation under two different acts can not be considered as double taxation.however it is still being debated if ocean freight is paid by exporter, he should be considered as recipient of service and not the importer.

5 Dated: 16-3-2018

Anything which is subject to RCM can never be treated as Double Taxation. Consider case of domestic supply of Goods, wherein in case of FOR price GST is paid on value of goods which is inclusive of freight.

Furthermore, you pay tax under RCM also on the same freight amount if services taken from transporter. It's actually the transporter liability and the burden to pay has been shifted on recipient as highlighted by Sh. Shukla ji.

The issue of non taxability of ocean freight has already been challenged in High Court as tax as recipient of service is actually the supplier of goods in case of CIF shipments and tax should not be charged.

6 Dated: 16-3-2018
By:- Rajagopalan Ranganathan


Whether credit of service tax paid for the period April 2017 to June 2017 under rule 7 CA of Service Tax Rules, 1994 can be availed on or after 1.7.2017 (after introduction of GST)? What is the provision available for availing the credit under CGST Act, 2017 and rules made therunder?

According to sub-section 8 (a) of Section 142 of CGST Act, 2017 " where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes recoverable from the person, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act.

I invite opinion of the experts of this forum.

7 Dated: 17-3-2018
By:- rajkumar shukla

Could not find any solution to this.

8 Dated: 18-3-2018
By:- Kishan Barai

As per Notification No. 2/2018. Central Tax (Rate); GST on Ocean Freight is 0%

9 Dated: 18-3-2018
By:- Prashant Gupta

@Sh Kishan Barai

Can you pls explain the notification no 02/2018 Central Act GST

10 Dated: 19-3-2018
By:- Kishan Barai

Exemption on GST from Export Freight till September 30th 2018. From nortification one can say that an exporter don’t have to pay GST on Air & Sea export freight. Earlier GST on Ocean Freight was 5% & Air Freight was 18%

Now enjoy CIF , CFR Shipment without GST . While in case of FOB Shipments the question of GST on Freight does doesn't arise.

11 Dated: 19-3-2018
By:- Prashant Gupta

@Kishan Barai

What is the status for importers importing the material on CIF basis

12 Dated: 19-3-2018
By:- Kishan Barai

For Importers GST on Freight has to be paid.

13 Dated: 18-4-2018
By:- Ankit Bansal

In this case, writ petition has been filled before Hon'ble High Court by M/s Mohit Minerals and which is still pending for final order.


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