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GST RCM on Ocean freight

Divyam Goel (Chartered Accountant) (36 Points)

01 October 2018

whether GST on RCM basis will be applicable on Ocean Freight charged by CHA?
He is issuing a single invoice for its agency charges as well as for freight.

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10 Replies

Pankaj Rawat (GST Practitioner) (55037 Points)
Replied 02 October 2018

As per Section 13(9)
The place of supply of services of transportation of goods, other than
by way of mail or courier, shall be the place of destination of such goods
So, in case of imports, the place of supply of services of
transportation of goods shall be in India and the same shall be liable to GST.
And
RCM is applicable on Ocean freight (As per Notification 10 IGSt (R)

hence you are liable
to pay IGST @ 5 % on 10 % of the CIF value of goods being imported, in respect of the transportation of goods by vessel services.

1 Like

Divyam Goel (Chartered Accountant) (36 Points)
Replied 02 October 2018

the confusion is that we are not paying freight directly to the carrier, we are paying to CHA i.e. CHA has paid the freight and now he is reimbursing the same from us.

Pankaj Rawat (GST Practitioner) (55037 Points)
Replied 02 October 2018

Dear
Now there is 2 condition :

1. If Your CHA is paying freight to Carrier & the same is being reimburse, in that case RCM is to be done , Ask for the shipping carrier documents from CHA & Do the RCM

2. If CHA is keeping is his profit on bill raise to you for shipping bill in that case your CHA is responsible for doing RCM , hence you are not liable do any RCM .

3 Like

Yogesh kumar (Student) (56 Points)
Replied 08 January 2019

Now CHA bill to party Ocean Freight + Tax 5% now party will take input tax Credit of 5% or not legible

SACHIN AROLKAR, Goa Carbon Ltd (MANAGER FINANCE & ACCOUNTS) (61 Points)
Replied 14 January 2019

Dear Sir,

Why one should pay GST twice on same Ocean freight when already paying IGST @ 18% on CIF value at the time of Custom Duty payment for clearing BE?.

Finally one would land up in paying 23% IGST (18%+5%) on Ocean freight.!!!!.

Why Government has issued two separate notification for levy of GST on same action. Is there any justification?.

In my opinion levy of double tax on Ocean freight (Repeating GST on same product/services) is incorrect.

GST actually introduced to simplify the taxation procedure and reduce the manufacturing cost to the customer,

Thanks and regards,
SACHIN A.

1 Like

Pankaj Rawat (GST Practitioner) (55037 Points)
Replied 14 January 2019

yes you are correct mr.sachin a..... what can be done ..we have to follow the law

Pawan Sehrawat (Auditor) (36 Points)
Replied 17 February 2019

Hello Pankaj Ji,

Will be thankful if you can substantiate that CHA will pay RCM if overseas shipper is billing in name of CHA and CHA is billing to actual importer of goods, after adding its maring in ocean freight import.
Since Sec 2(26) Custom Act says, Import to pay RCM IGST.

Kunal Verma (Accountant) (83 Points)
Replied 19 March 2019

Hello,

Please clarify whether GST liability on ocean freight arises in the month of bill of lading filed by the exporter or after filing of bill of entry by importer at the time of receipt of goods. Suppose exporter has shipped the goods in the month of February and importer received the goods and filed bill of entry in the month of March, whether gst to be paid in Feb month return or March month return.