TMI BlogOcean Freight-A Brief study of Recent Supreme Court Judgement dismissing petition of Union of India in case of RCM.X X X X Extracts X X X X X X X X Extracts X X X X ..... fications being an outcome of delegated legislation i.e. Notification 08/2017 and Notification 10/2017 create deeming fiction and separate taxable event on the analogy of Reverse Charge Mechanism which is not permissible in law as it creates a double/dual taxation event thereby hurting the legal interests of the Appellant in equity and law both impinging upon constitutional rights. Accordingly, a writ petition was instituted in the Hon'ble Gujarat High Court challenging aforesaid Notifications ( 8/2017 and 10/2017 ) on the basis: 1. The aforesaid notifications are ultra vires the IGST Act and CGST Act . 2. Customs duty is levied on the component of ocean freight and the levy of IGST on the freight element in the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of supply, not specify a third-party as a recipient of such supply. There is no territorial nexus for taxation since the supply of service of transportation of goods is by a person in a non-taxable territory to another person in a non-taxable territory from a place outside India. It being neither an inter-state nor an intra-state supply. The goods being transported on a CIF basis, the recipient of service is the foreign exporter who is outside India. Union of India (UOI) assails the order of Hon'ble Gujarat High Court. The rationale for the aforesaid impugned notifications, according to the Union Government, is to remove the separatism between Indian and foreign shipping lines, as the former are unable to claim input tax cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the transaction is in violation of the principle of composite supply enshrined under Section 2(30) read with Section 8 of the CGST Act . Since the Indian importer is liable to pay IGST on the composite supply , comprising of supply of goods and supply of services of transportation, insurance, etc. in a CIF contract, a separate levy on the Indian importer for the supply of services by the shipping line would be in violation of Section 8 of the CGST Act. Hon'ble Supreme Court opined that tax on the supply of a service, which has already been included by the legislation as a tax on the composite supply of goods, cannot be allowed. A tax on the supply of a service, which has already been included by the legislation as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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