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TMI Blog2024 (6) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... ds' that existed under the then extant provisions, viz., 'proviso to Section 12 (8)' and Section 13 (9) of the IGST Act, 2017. Accordingly, taxes under IGST was liable to be charged for such transactions, as the place of supply was 'outside India', which is to be treated as 'services in the course of inter-state trade or commerce' as laid down in Section 7 (5) of the IGST Act, 2017. The instant transaction becomes a case of intra-state supply, whereby taxes under CGST/SGST becomes liable to be discharged by the service provider, i.e., the shipping line/freight forwarder who is reported to be having an office in Thoothukudi, Tamilnadu. It is to be reiterated here that the GST liability existed prior to 1.10.2023 as well, and that only the nature of supply and thereby the nature of tax to be charged has undergone a change. It is also to be reiterated that once the liability to tax under GST in the instant case vests with the shipping line/freight forwarder, no further liability lies with the applicant in respect of the same service, as the same is in the nature of input services received by them, and as they reportedly undertake export of goods on 'CIF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is liable to pay GST as CGST SGST, or IGST. 2. The Applicant submitted a copy of the challan 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. 3. 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. 4. The sunset clause of exemption of GST on Ocean freight and Air Export freight under Notification No. 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. In the case of CIF basis of export, the freight is paid by the exporter and freight forwarder/ shipping line charges the GST on freight on forward basis. 5. On interpretation of law, it was seen that the applicant has not submitted their interpretation of law and/or facts, in the application filed, but furnished the same as below vide their letter d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the facts of the case. The authorised representative undertook to furnish the same in 3-4 days' time. 8.3 As undertaken by them, under a letter dated 28.12.2023, they furnished the statement of interpretation and requested that the same be taken into account. 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 29.11.2023, they have added certain additional submissions by way of their letter dated 28.12.2023, to the 'Statement of interpretation' already furnished by them and requested to take the same on record. DISCUSSION AND FINDINGS: 9.1 We have carefully considered the submissions made by the Applicant in their application, submissions made during the personal hearing and the comments furnished by the Centre and State Tax jurisdictional officers. We find that the applicant has filed an application seeking Advance Ruling on the following: 1. Whether the exporter (M/s. DCW Ltd) is liable to pay GST on the export freight as CGST SGST, or as IGST. 2. Whether the shipping lin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25.01.2018, Sl. Nos. 20A and 20B were inserted after SI. No. 20, to provide for exemption on services by way of transportation of goods by an aircraft, and by a vessel, respectively, when the said services are provided from customs station of clearance in India to a place outside India. However the conditions attached to SI. Nos. 20A and 20B, read as Nothing contained in this serial number shall apply after the 30th day of September 2018 . The said condition was extended time and again, and as a 'sunset' clause, it was extended upto 30.09.2022 vide Notification No. 07/2021-Integrated Tax (Rate) dated 30.09.2021, beyond which no such extension was provided under any other notification. 9.5 This meant that the provision of such services of 'transportation of goods from customs station of clearance in India to a place outside India' when provided by means of an aircraft or a vessel have become taxable with effect from 01.10.2022. Apart from this, it is also pertinent to note that in cases of outbound shipments whether by air or by sea, where both the parties (supplier and recipient) are in India, the place of supply was to be determined in terms of the proviso to Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 (where location of supplier and recipient is in India) when provided to a 'registered person', shall be the location of such person, which in turn happens to be the 'recipient of service'. 9.8 In order to align with the change in 'place of supply', after the amendments carried out in respect of the aforesaid legal provisions as discussed above, the CBIC has caused the issue of the certain Notifications, in order to amend/omit the clauses that existed so far with effect from 01.10.2023, in the respective parent notifications, as mentioned below:- S.No. Amendment Notification No./Date Parent Notification No./Date Changes effected 1 11/2023-IT (R) dt. 26.09.2023 8/2017-IT (R) dt. 28.06.2017 (Rate Notification) A portion of the words omitted in item (ii) of column (3) against serial number 9 of the table. 2 12/2023-IT (R) dt. 26.09.2023 9/2017-IT (R) dt. 28.06.2017 (Exemption Notfn) A new 'proviso' substituted against the existin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussed in detail in paras 9.5 and 9.6 above, the 'place of supply' in respect of such services now gets fixed at the location of the 'recipient of service'. In the instant case of the applicant, it is observed from the details furnished by the applicant that both the service provider and recipient (applicant) are in Thoothukudi, Tamilnadu. Further, as per the existing legal provisions with effect from 1.10.2023, the 'place of supply' of such services is the place of the recipient, which again is Thoothukudi, Tamilnadu. Accordingly, as on date, the instant transaction becomes a case of intra-state supply, whereby taxes under CGST/SGST becomes liable to be discharged by the service provider, i.e., the shipping line/freight forwarder who is reported to be having an office in Thoothukudi, Tamilnadu. It is to be reiterated here that the GST liability existed prior to 1.10.2023 as well, and that only the nature of supply and thereby the nature of tax to be charged has undergone a change. It is also to be reiterated that once the liability to tax under GST in the instant case vests with the shipping line/freight forwarder, no further liability lies with the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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