Ocean freight levy under IGST was held unsustainable, and the notifications imposing it were quashed as ultra vires.

Integrated tax on ocean freight for transportation of goods by vessel from outside India to the customs station of clearance in India was found unsustainable, the issue being treated as covered by a Supreme Court ruling that had already invalidated the levy. The notifications creating the charge under Notification No. 8/2017-Integrated Tax (Rate) and entry 10 of Notification No. 10/2017-Integrated Tax (Rate) were examined as lacking legal foundation under the IGST Act, 2017. On that basis, the impugned notifications were quashed as ultra vires, and no integrated tax was held leviable on ocean freight in the stated situation.

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Issues: Whether Notification No. 8/2017-Integrated Tax (Rate) dated 28.06.2017 and entry 10 of Notification No. 10/2017-Integrated Tax (Rate) dated 28.06.2017 were liable to be struck down, and whether integrated tax was leviable on ocean freight for services supplied by a person located in a non-taxable territory by way of transportation of goods by vessel from a place outside India up to the customs station of clearance in India.

Analysis: The issue was treated as covered by the Supreme Court decision holding that the impugned levy on ocean freight could not be sustained. In light of that binding position, the notifications creating the levy were examined as lacking legal foundation under the Integrated Goods and Services Tax Act, 2017. The respondents did not dispute the applicability of that decision.

Conclusion: The impugned notifications were quashed as ultra vires, and it was held that no integrated tax is leviable on ocean freight in the stated situation.

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