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The transportation of goods in a vessel from a non-taxable territory to taxable territory amounts to import of service and such ocean freight is leviable to IGST as an inter-state supply of service and the Applicant, being the importer, are liable to pay IGST under reverse charge mechanism.

Levy of GST— The applicant seeks advance ruling on the basis of above facts;-

1.1 Whether such ocean freight is leviable to GST as a supply of service or not?

1.2 Whether the said transaction does qualify as import of service or not?

1.3 Whether their transaction will qualify as inter-state supply or not?

1.4 Whether the applicant can be deemed as the recipient of the service or the person liable to pay tax or not?

1.5 Whether the applicant is liable to pay tax under reverse charge mechanism or not?

2.1 Levy of IGST on ocean freight as a service, while levying Customs duties by including fright charges also in the value of imported goods, amounts to double taxation or not?

2.2 Exclusion of value of subsidy and levy of IGST on ocean freight are leading to accumulation of credit or not? and is it not against the spirit of GST law which is intended for eliminating the cascading effect ?

Held that—
The transportation of goods in a vessel from a non-taxable territory to taxable territory amounts to import of service and such ocean freight is leviable to IGST as an inter-state supply of service and the Applicant, being the importer, are liable to pay IGST under reverse charge mechanism prescribed vide Notification No. 10/2017 -Integrated tax (Rate) dated 28.06.2017, by following the valuation as per Notification No.8/2017-Integrated Tax (Rate), dated 28-6-2017, irrespective of valuation adopted for the import of goods i.e. FOB or CIF.

The issues raised on double taxation, subsidies and cascading effect leading to accumulation of credit fall beyond the purview of Section 97 of CGST / APGST Act,2017.—Indian Potash Limited, In Re… [2019] 09 TAXLOK.COM 090 (AAR-AP)