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TMI Blog2024 (6) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... he FOB basis of exports by the exporter (M/s. DCW Ltd.), does not arise. Whether the shipping line who accepts the goods from the exporter (M/s. DCW Ltd.] is liable to pay GST on RCM basis? - HELD THAT:- As the shipping line is not the applicant, and does not transact with the applicant in the instant case involving export of goods on FOB basis, this query need not be answered by the Authority for advance Ruling. Whether the export freight involved is liable to GST on RCM basis for the goods exported (on which GST is Hable and permitted to be exported under LUT] on FOB basis (Free on Board)? - HELD THAT:- The query on export freight involved need not be answered, as it does not relate to the applicant, and as the applicant does not undertake or receive export freight service. Whether the export freight involved above constitutes an inter-state supply subject to IGST? - HELD THAT:- The query on export freight involved need not be answered, as it does not relate to the applicant, and as the applicant does not undertake or receive export freight service. If liable to GST, what is the taxable value to be adopted as freight is not known to the exporter? - HELD THAT:- Does not apply, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect to IGST; and 5) If liable to GST, what is the taxable value to be adopted as freight is not known to the exporter. 2.1 The Applicant submitted the details of debit entry vide No. DC3310220172122 evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. 2.2 The authorities of the Centre and State were addressed to report if there are any pending proceedings against the applicant on the issues raised by the applicant in the Advance Ruling application and for comments on the issues raised. 3. The Applicant, in the Statement of facts has stated that:- 3.1 The sunset clause of exemption of GST on Ocean freight and Air Export freight under notification 08/2017 (integrated tax) serial number 9 item (ii) Transport of goods in a vessel @ 5% and item (vii) Goods transport services other than (i) to (vi) i.e., Air at 18%, has not been extended beyond 01.10.2022 and thus the ocean freight and air freight on exports have become taxable. 3.2 In the case of CIE basis of export, the freight is paid by the exporter and the freight forwarder/ shipping line charges the GST on freight on forward basis and thus there is no issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed improperly, and that in actual terms, the queries were meant to involve only the ocean freight involved on the export of goods, and that the same is not about the export of goods, per se. He further stated that he would re-phrase the queries at SI. No. 3 and 4 of the application to this effect in the nature of an amendment, and to furnish a write-up on the various queries raised, involving the facts of the case and their interpretation of law relating to the case. 7.3 As undertaken by them, the applicant vide their letter dated 28.12.2023 requested the Advance Ruling Authority to permit the rephrasing of the queries numbered 3 and 4, as follows Query 3 : Whether the export freight involved is liable to GST on RCM basis for the goods exported (on which GST is liable and permitted and exported under LUT) on FOB basis (Free on Board). Query 4 : Whether the export freight involved above constitutes an interstate supply subject to IGST. 8. Accordingly, they were accorded another opportunity of hearing on 12.01.2024, Shri M. Thyagamoorthy, General Manager (Legal Indirect Taxation), attended the hearing in virtual mode. The AR stated that as undertaken in the personal hearing held on 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d recipient is in India Section 13 - Place of supply of services where location of supplier or location of recipient is outside India Section 14 - Special provision for payment of tax by a supplier of online information and database access or retrieval services. As could be seen from the above, Sections 10 and 11 discusses about the place of supply of goods , and Section 14 discussed about Online information and database access or retrieval service . As the issue in the instant case revolves predominantly around the service involving export freight , Section 12 and 13 which discusses about the place of supply of services , are found to be relevant to this case. 9.4 At the outset, as one may be aware Sl. No. 20 of the Exemption Notification No. 9/2017-Integrated Tax (Rate) dated 28.06.2017 provided for exemption on services relating to Services by way of transportation of goods by an aircraft from a place outside India upto the customs station of clearance in India. Vide Notification No. 2/2018-Integrated Tax (Rate) dated 25.01.2018, Sl. Nos. 20A and 20B were inserted after Sl. No. 20, to provide for exemption on services by way of transportation of goods by an aircraft, and by a ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions, i.e., proviso to Section 12 (8) of the IGST Act, 2017, and Section 13 (9) of the Act, ibid, proposed under Sections 161 and 162 respectively of the Finance Act, 2023 (No. 8 of 2023), takes effect, by way of Notification No. 28/2023-Central Tax dated 31.07.2023. That is to say that from 1.10.2023 onwards, with the omission of Section 13 (9), the place of supply under Section 13 (where location of supplier or location of recipient is outside India) gets fixed by default as the location of the recipient of service , vide Section 13 (2) of IGST Act, which states as (2) The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services. . Likewise, Section 12 (8) of the IGST Act, 2017, now (from 1.10.2023) operates without the proviso, which reads as (8) The place of supply of services by way of transportation of goods, including by mail or courier to,- (a) a registered person, shall be the location of such person; (b) a person other than a registered person, shall be the location at which such goods are handed over for their transportation. Here again, the place of supply of such services under Section 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght, which will be handled by the overseas buyer. Further, the freight forwarder/shipping line that undertakes the export freight may be a foreign based supplier of service, or an Indian based supplier of service, or a foreign based supplier having an Office in Thoothukudi, or elsewhere in India. It may be noted that all these situations have a bearing on the determination of the nature of supply, i.e., whether to be treated as an inter-state supply or an intra-state supply . 9.10 Notwithstanding the same, we are of the opinion that any query not relating to the applicant, need not be answered, since the definition of advance ruling , as provided under Section 95 (a) of the CGST Act, 2017, reproduced below speaks about the decision to be provided in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant, i.e., (a) advance ruling means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 , where the importer of goods , is liable to pay taxes under IGST on RCM basis. It may be noted however, that the said entry at Sl. No. 10 stands omitted with effect from 01.10.2023, in terms of Notification No. 13/2023-Integrated Tax (Rate) dated 26.09.2023. In effect, as on date, no entries relating to export freight finds a place in any of the RCM notifications referred above. 9.12.1 Whether the exporter (M/s. DCW Ltd.] is liable under RCM basis to pay GST on the export freight on the FOB basis of exports - We find that in the instant case of exports on FOB basis, the exporter (applicant) is not at all involved in any way with the export freight , as the same is to be arranged by the overseas buyer themselves, or through his agent. We further find that the exporter is neither the provider nor the recipient of service relating to export freight . Therefore, the question of payment of GST on RCM basis on the export freight on the FOB basis of exports by the exporter (M/s. DCW Ltd.), does not arise. 9.12.2 Whether the shipping line who ..... X X X X Extracts X X X X X X X X Extracts X X X X
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