Govt exempts 5% integrated GST on ocean freight imports from October 1, highlights a Business Standard news source.
Government gives exemption
The government has exempted payments made for goods imported through ocean freight from 5 per cent integrated GST with effect from October 1.
The Finance Ministry has notified changes to the IGST Act with regard to payment of integrated GST on ‘ocean freight’ on imported goods with effect from October 1.
Currently, importers are required to pay 5 per cent GST under the Reverse Charge Mechanism.
KPMG Indirect Tax Head & Partner Abhishek Jain said the amendments proposed are aligned with the apex court’s ruling in the case of Mohit Minerals and help explicitly mention the government’s alignment to the position.
“While this has been issued prospectively, the industry has been seeking and successfully claiming refund of taxes already paid for the past period, where credit has not been availed,” Jain added.
Giving its ruling in the Mohit Minerals case, the Supreme Court in May last year had held that 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 (Cost Insurance Freight) contract, a separate levy on the Indian importer for the ‘supply of services’ by the shipping line would be in violation of the GST Act.
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Source: Business Standard
