TMI Blog2019 (7) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... outside India up to the customs station of clearance in India have been put under Reverse Charge Mechanism and the recipient of service viz. Importer, as defined in clause (26) of Section 2 of the Customs Act 1962 (52 of 1962), located in the taxable territory - Further, in terms of Notification No.8/2017-lntegrated Tax (Rate) dtd.28.06.2017, read with Corrigendum dtd.30.06.2017, the taxable value in respect of ocean freight has been defined as, Where the value of taxable service 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 is not available with the person liable for paying integrated tax, the same shall be deemed to 10% of the CIF value (sum of cost, insurance and freight) of imported goods . In view of the above two notifications we do not find any ambiguity, whatsoever, regarding payment of IGST on ocean freight. As per existing law, IGST on ocean freight has to be paid by the importer under reverse charge mechanism, irrespective of the fact that such freight charges are included in the intrinsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the seller is supposed collect the ocean freight while deciding the price of the goods payable by the applicant. The payment of ocean freight would be made by the seller located outside India. 3.4 As per corrigendum issued on 30.06.2017 to the Notification No. 8/2017-Integrated Tax (Rate) dated 28th June, 2017, the importer of the goods is required to pay IGST on Reverse Charge Mechanism on the amount of deemed ocean freight equal to 10% of the value of goods imported. 3.5 The issue raised by the applicant is on Applicability of Reverse Charge Mechanism on Ocean Freight when IGST is paid by the importer on Goods Imported on CIF Basis. 4. QUESTIONS RAISED BEFORE THE AUTHORITHY :- Whether the applicant /importer is again required to pay IGST on the component of ocean freight under RCM mechanism on deemed amount which will amount to double taxation of IGST on the deemed component of ocean freight of the imported goods? 5. CONCERNED OFFICERS S VIEW POINT: The Concerned Officer Submitted that Applicant shall be liable to pay IGST on ocean freight paid on imported goods under Reverse Charge Mechanism in terms of Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India A person located in non-taxable territory Importer, as defined in clause (26) of section 2 of the Customs Act, 1962 (52 of 1962), located in the taxable territory. 6.6 The Applicant stated that as per aforesaid Notification, the applicant /importer is again required to pay IGST on the component of ocean freight incurred by them under RCM mechanism. If this is paid by the applicant/importer, it will amount to double taxation of IGST on the same component of ocean freight of the imported goods which apparently illegal and against the basic principles GST of law. Copy of aforesaid Notification No. 10/2017- Integrated Tax (Rate) dated 28th June, 2017 is attached herewith for your ready reference. 6.7 From the facts mentioned above, it is clear that the Department will be charging IGST on vessel ocean freight twice which amounts to double taxation. 6.8 It is settled law that there should not be any double taxation of same tax on the same goods. 7. DISCUSSIONS AND FINDINGS: 7.1 We have carefully consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot available with the person liable for paying integrated tax, the same shall be deemed to 10% of the CIF value (sum of cost, insurance and freight) of imported goods 7.5 In view of the above two notifications we do not find any ambiguity, whatsoever, regarding payment of IGST on ocean freight. As per existing law, IGST on ocean freight has to be paid by the importer under reverse charge mechanism, irrespective of the fact that such freight charges are included in the intrinsic CIF value. 7.6 We find from the application that the applicant has pleaded that the authority to levy and collect IGST on import of goods from outside India vests under the Customs Act only hence on deemed value of ocean freight the levy of RCM is without jurisdiction. As we could construe, the applicant has broadly challenged the validity of levy of IGST on ocean freight under RCM. We observe that any question relating to constitutional validity of the Notifications issued is not within the ambit of the jurisdiction of this Authority. Nevertheless, it is pertinent to mention here that the Notifications are issued on the basis of the recommendations of the GST Council, and the GST Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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