Tax on Brokerage

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This discussion examines whether a Chennai-based shipbroker must charge GST on freight booking services provided to a Singaporean ship owner. Although the cargo travels from Australia to South Africa and never enters Indian waters, the consensus leans towards GST applicability as the service is provided by an intermediary located in India. However, this raises a paradox, as some suggest GST might not apply if the service is entirely rendered outside India.

H B BHASKAR SHENOY

H B BHASKAR SHENOY (Querist)

05 May 2020 A Shipbroker, based in Chennai, renders freight booking services to a ship owner in Singapore. The cargo is moved from Australia to South Africa and does not touch Indian Territorial Waters at all. Is he required to charge GST to the client in Singapore?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

05 May 2020 Yes, he is required to charge GST as he is an intermediary.

H B BHASKAR SHENOY

H B BHASKAR SHENOY (Querist)

06 May 2020 But the cargo does not touch Indian Territorial Waters at all? I agree place of supply for an intermediary is the location of his office, in this case, Chennai. But when the cargo movement is not connected to India at all, still it is chargeable - is this not a paradox?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

06 May 2020 Yes, I agree with you it's a paradox can be considered as GST not applicable as it's a service rendered outside India.

H B BHASKAR SHENOY

H B BHASKAR SHENOY (Querist)

06 May 2020 Thank you sir, much obliged

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

06 May 2020 Welcome.................

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