ITC on VGA, ACD, Oncarriage charges

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This discussion clarifies whether exporters can claim Input Tax Credit (ITC) on charges like VGM, ACD, and oncarriage levied by a Customs House Agent (CHA). While ITC is generally claimable on services with a valid tax invoice showing GST, a key point is that GST is not applicable to services rendered outside India. Therefore, GST officials may decline such claims if the services were performed abroad, even if invoiced with GST. It's advised to check GSTR 2A/2B for credit availability and consult tax experts regarding GST on foreign services.

N J Patel

N J Patel (Querist)

02 May 2024 Sir,
Can we claim ITC on VGA, ACD, and On carriage charges levied by CHA to Exporter?
These services are paid by shipping line in foreign currency, shipping line further charged these to Indian CHA, and so on CHA charged to Exporter with GST 18%.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

03 May 2024 Yes, ITC can be claimed as you have tax invoice with GST.

N J Patel

N J Patel (Querist)

03 May 2024 Sir, Thank you for the answer, to be more specific, I am providing more details pl help

normal transactions of Export, CHA always charges for the services rendered, like transportation, custom clearance, VGM, ACD, oncarrige charges ETC.

As part of the export transaction, some of the services are rendered outside India, so on any ground, can it be declined by GST officials, that the services rendered outside India, ignoring the line invoice and CHA invoice charged to the exporter with 18% GST?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

03 May 2024 GST not applicable on services rendered outside India. GST official can decline such services.
Let your CHA take advice from tax experts and not to charge GST on exempt items

N J Patel

N J Patel (Querist)

03 May 2024 Thank you, sir, will convey the same to the CHA.
But sir, what about the transactions done till now, can the exporter claim ITC based on valid invoices charged with GST @18%?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

04 May 2024 Check GSTR 2A and 2b if credit is available claim it.

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