GST on Ocean Freight, Goods and Services Tax - GST

[Kaustubh Karandikar]

XYZ imported goods by sea from Brazil. The invoice of Brazilian freight forwarder was in the name of Indian CHA and paid also by him. Subsequently, the Indian CHA issued a debit note on XYZ for recovery of these freight charges. The GST under reverse charge to be paid on the ocean freight paid to Brazilian freight forwarder is to be paid by XYZ or the Indian CHA?

Posts / Replies

[Shilpi Jain]

Without looking into the possible challenge to the RCM liability under GST on the freight charges, if we look at the RCM notification it states that the liabilty to pay tax is on the importer. In that case the person filing BoE would be liable i.e. XYZ.

[KASTURI SETHI]

CHA is only playing the role of facilitator. He is a pure agent. De facto, he is not buyer/importer. Expenses are to be borne by XYZ (importer) and not by CHA. Hence XYZ is liable to discharge tax liability on ocean freight.

[Ganeshan Kalyani]

As per notification the importer has to pay IGST under RCM. If the import term CIF then 10% of the same to be considered as ocean freight and pay GST @5% on the same. If FOB then freight is know to the importer. Gst%@5% on the freight is payable. And if the outward supply of the importer is taxable then the input tax credit of the IGST paid is eligible.