Is rcm applicable on ocean freight

Reply—In terms of notification no. 10/2017- IGST - Entry no. 10 states that Services supplied by a person located 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. in such cases, the gst is payable by the recipient importer of the services.

Thus, if you are directly receiving freight services from the service provider located outside India, you are required to pay IGST.

In case of Mohit Minerals Ltd [2020] 20 TUD Online 045 (Gujarat) Gujrat High Court held that the writ-applicants challenged the levy of the IGST on the estimated component of the Ocean freight paid for the transportation of the goods by the foreign seller as sought to be levied and collected from the writ-applicants as the importer of the goods. No tax is leviable under the IGST 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. However, department has filed petition with SC.

CBEC has not issued any notification or circular in this regard, therefore taxpayers are still liable to pay taxes. Still it is matter of litigation.