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2020 (3) TMI 561 - HC - GSTLevy of IGST on Ocean Freight - Reverse Charge (RCM) - Refund of GST already paid - Constitutional Validity of N/N. 8/2017-Integrated Tax (rate) dated 28.06.2017 and Entry 10 of the notification no.10/2017-Integrated Tax (Rate) dated 28.06.2017 - HELD THAT - The issue is decided in the case of MOHIT MINERALS PVT LTD VERSUS UNION OF INDIA 1 OTHER 2020 (1) TMI 974 - GUJARAT HIGH COURT where it was held that No tax is leviable under the Integrated Goods and Services Tax Act, 2007, on the ocean freight for the services provided by a person located in a non-taxable territory by way of transportation of goods by a vessel from a place outside India upto the customs station of clearance in India and the levy and collection of tax of such ocean freight under the impugned Notifications is not permissible in law. It was also held that The impugned Notification No.8/2017 Integrated Tax (Rate) dated 28th June 2017 and the Entry 10 of the N/N.10/2017 Integrated Tax (Rate) dated 28th June 2017 are declared as ultra vires the Integrated Goods and Services Tax Act, 2017, as they lack legislative competency. Both the Notifications are hereby declared to be unconstitutional. In view of the case, no further adjudication is required in this matter - petition disposed off.
Issues: Challenge to impugned notifications under Integrated Goods and Services Tax Act, 2017 regarding taxation on ocean freight for services supplied by a person in a non-taxable territory.
Analysis: 1. The writ-application sought various reliefs challenging the impugned notifications related to taxation under the Integrated Goods and Services Tax Act, 2017. The petitioner requested the quashing of the notifications, declaring them lacking legislative competency and unconstitutional. Additionally, the petitioner sought a writ to stop tax levy on ocean freight for services provided by a person in a non-taxable territory. The petitioner also asked for records of recommendations and decisions related to the notifications, and a refund of the tax collected with interest. 2. The judgment delivered by the High Court on January 23, 2020, in a batch of writ applications, settled the issues raised in the present writ-application. The Court concluded that in a CIF contract, the importer is not the recipient of the service of transportation of goods, supporting the contention that no tax is leviable on ocean freight under the Integrated Goods and Services Tax Act, 2017. The Court held that the levy and collection of tax on such ocean freight under the impugned notifications were not permissible under the law. Consequently, the impugned notifications were declared ultra vires the Act and unconstitutional, thereby allowing the writ-application and connected petitions. 3. As a result of the judgment and the settlement of the issues, no further adjudication was deemed necessary in the present matter, and the petition was disposed of accordingly. The Court directed that the petitioner could seek ancillary reliefs by approaching the concerned department for appropriate orders. The decision provided clarity on the taxation of ocean freight services under the Integrated Goods and Services Tax Act, 2017, setting a precedent for similar cases in the future.
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