No IGST/ Service Tax on Ocean Freight under CIF Contracts - Importer Not 'Recipient' and Levy Violates Composite Supply Principle

Last updated: 22 May 2026

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The Bombay High Court has ruled that importers operating under CIF contracts are not liable to pay IGST or Service Tax on ocean freight. The court found that importers are neither the recipient nor the provider of these services, making the levy invalid. Furthermore, taxing ocean freight separately violates the principle of composite supply under GST law, as freight is an integral part of the overall import transaction.

Court :
Bombay High Court

Brief :
The Hon’ble Bombay High Court in the case of Firmenich Aromatics Production India Pvt. Ltd. vs Union of India & Ors. [Writ Petition No. 385 of 2019, order dated February 26, 2026] held that importers under CIF contracts are not liable to pay IGST/service tax on ocean freight under reverse charge, as they are neither recipient of such services and such levy violates the concept of composite supply under GST law.

Citation :
Writ Petition No. 385 of 2019, order dated February 26, 2026

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Attached File : 671907_5987_firmenich_aromatics_production.pdf

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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