XYZ (India) (Freight Forwarder) had paid the amount to a foreign shipping line towards ocean freight in foreign currency. This amount along with mark up was recovered from the importer in India i.e., the client of XYZ who had entrusted the work to XYZ towards transportation of goods by Sea against imports. XYZ charged the importer GST @ 5% under the head ‘Transport of goods in a vessel’(SAC Code 9965). Is it correct?
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GST on ocean freight & Freight Forwarder
Replies (1)
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Import Ocean Freight: GST is generally not applicable due to the exemption effective from October 1, 2023.
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Freight Forwarding Services (Markups/Handling): These are typically taxable at 18% GST.
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Recommendation: Freight forwarders should bifurcate their invoices into (a) the pure freight component (exempt) and (b) logistics/handling/markup fees (taxable at 18%) to ensure compliance and avoid audit risks.
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