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REGARDING RCM ON OCEAN FREIGHT ON IMPORT ON CIF BASIS

20 December 2018

RESPECTED ALL

I HAVE ONE QUERY ABOUT OCEAN FREIGHT ON IMPORT.IS RCM APPLICABLE ON OCEAN FREIGHT,IF IMPORT AGREEMENT IS ON CIF BASIS? IF YES THAN HOW CAN WE CALCULATE IT. PLS GUIDE....

THANKS
PRAVEEN KUMAR JHA
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6 Replies

Pankaj Rawat (GST Practitioner) (55037 Points)
Replied 21 December 2018

As per Notification 10/2017 IGST (R) , Yes RCM is applicable .

pay IGST @ 5 % on 10 % of the CIF value of goods being imported,

Vipul Acharya (Account Officer) (646 Points)
Replied 21 December 2018

whether same rule not applicable in case of import on FOB basis

Pankaj Rawat (GST Practitioner) (55037 Points)
Replied 21 December 2018

NO.....IN CASE OF FOB:the Applicant (importer) is liable to bear the cost of
transportation of goods from the respective country upto Indian ports. Hence, for the transportation of the
goods, the Applicant (importer) avails the services of a shipping entity for bringing the said goods to India in a
vessel. In case the said shipping company is located outside India, then the Applicant importer pays the GST
applicable on the supply of services of transportation of goods in a vessel on reverse charge basis in terms
of Section 5(3) of the IGST Act.

HENCE IN CASE OF FOB THE IMPORTER KNOW THE VALUE OF TRANSPORTATION BILL PAID TO SHIPPING COMPANY AS HE PAYS THE SAME .

SO IN FOB THE RCM HAS TO BE DONE THE FREIGHT PAID